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The bid-ask spread for dollars in Kuwait: a brief note

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  • Nurhan Davutyan

Abstract

This paper uses the Demsetz-Bagehot theory of dealer services and bid-ask spreads to analyse the determinants of the bid and ask spread in the Kuwaiti foreign exchange market for dollars. The explanatory variables predicted by the theory are found to be significant. Idiosyncrasies arising from the country and period under analysis are highlighted.

Suggested Citation

  • Nurhan Davutyan, 1997. "The bid-ask spread for dollars in Kuwait: a brief note," Applied Economics Letters, Taylor & Francis Journals, vol. 4(11), pages 715-717.
    • Handle: RePEc:taf:apeclt:v:4:y:1997:i:11:p:715-717
    DOI: 10.1080/758530656
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    References listed on IDEAS

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    1. Glassman, Debra, 1987. "Exchange rate risk and transactions costs: Evidence from bid-ask spreads," Journal of International Money and Finance, Elsevier, vol. 6(4), pages 479-490, December.
    2. Harold Demsetz, 1968. "The Cost of Transacting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(1), pages 33-53.
    3. Richard Deaves, 1991. "Canadian Weekly Money Supply Announcements and Financial Market Reactions in the First Years of Targeting: A View of Market Perceptions of Bank of Canada Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 282-299, May.
    4. Dornbusch, Rudiger & Pechman, Clarice, 1985. "The Bid-Ask Spread in the Black Market for Dollars in Brazil: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(4), pages 517-520, November.
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