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Determinants of exchange rate practices: some empirical evidence from Thailand

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  • Frank Agbola
  • Chartri Kunanopparat

Abstract

Although Thailand has achieved a spectacular average annual growth rate of 8% in the past two decades, due largely to the opening of the economy to international trade, there is not yet a consensus on the exchange rate regime that is most suited to the restoration of sustained growth in Thailand. This study empirically investigates the predictors of exchange rate regimes in Thailand using quarterly data spanning the period 1990:1 and 2002:3. Results indicate that the government is likely to choose a pegged exchange rate regime in periods of monetary shocks and unsustainable public finance whereas an open economy with a degree of economic development and foreign reserves will encourage the government to opt for a flexible exchange regime in Thailand.

Suggested Citation

  • Frank Agbola & Chartri Kunanopparat, 2005. "Determinants of exchange rate practices: some empirical evidence from Thailand," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 807-816.
    • Handle: RePEc:taf:applec:v:37:y:2005:i:7:p:807-816
    DOI: 10.1080/00036840500061061
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    3. Venus Khim-Sen Liew & Ahmad Zubaidi Baharumshah & Chin-Hong Puah, 2009. "Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions," Global Economic Review, Taylor & Francis Journals, vol. 38(4), pages 385-395.
    4. Sofoklis Vogiazas & Constantinos Alexiou & Orafiri C. Ogan, 2019. "Drivers of the real effective exchange rates in high and upper‐middle income countries," Australian Economic Papers, Wiley Blackwell, vol. 58(1), pages 41-53, March.
    5. Ahmet Ugur & Yusuf Ekrem Akbas & Mehmet Senturk, 2014. "Long Term Validity of Monetary Exchange Rate Model: Evidence from Turkey," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(51), pages 111-136, March.
    6. Syed Ali Raza & Sahar Afshan, 2017. "Determinants of Exchange Rate in Pakistan: Revisited with Structural Break Testing," Global Business Review, International Management Institute, vol. 18(4), pages 825-848, August.

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