IDEAS home Printed from https://ideas.repec.org/a/jda/journl/vol.48year2014issue2pp39-62.html
   My bibliography  Save this article

The determinants of bid-ask spread in the guyanese fx market

Author

Listed:
  • Tarron Khemraj

    (New College of Florida, USA)

  • Sukrishnalall Pasha

    (University of Guyana, Guyana)

Abstract

Utilizing the method of generalized least squares (GLS), the paper investigates the factors which determine bid-ask spread in the foreign exchange (FX) market of Guyana. The econometric exercise is based on a rich dataset of trading volumes as well as the buying and selling exchange rates for each cambio (or trader) from January 2000 to December 2007. The main findings are: (i) a positive relationship between a measure of market power and spread; (ii) a positive relationship between hoarding of FX and spread; and (iii) a strong positive association between risk and spread. The key contribution of this paper to the literature is the evidence that traders have the ability to influence the BAS, and by extension the exchange rate.

Suggested Citation

  • Tarron Khemraj & Sukrishnalall Pasha, 2014. "The determinants of bid-ask spread in the guyanese fx market," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(2), pages 39-62, April-Jun.
    • Handle: RePEc:jda:journl:vol.48:year:2014:issue2:pp39-62
    as

    Download full text from publisher

    File URL: http://muse.jhu.edu/journals/journal_of_developing_areas/v048/48.2.khemraj.html
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Bid-ask Spread; Foreign Exchange Market; GLS; Time Series; and Cross Section (TSCS) Data Models;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jda:journl:vol.48:year:2014:issue2:pp39-62. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Abu N.M. Wahid (email available below). General contact details of provider: https://edirc.repec.org/data/cbtnsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.