THE EFFECT OF EXCHANGE RATE FLUCTUATIONS ON INFLATION IN EGYPT | ||
| Journal of Contemporary Business Research | ||
| Volume 2, Issue 1, April 2025, Pages 73-94 PDF (761.98 K) | ||
| Document Type: Researches | ||
| DOI: 10.21608/jcbre.2025.422452 | ||
| Authors | ||
| Salma M.A. El-Shahed* 1; Ahmed S. AbuZeid2; Ahmed S. El-Bakl2; Salah A. AbuEl-Nasr1 | ||
| 1Department of Economics, Faculty of Commerce, Arish University, Egypt. | ||
| 2Department of Economics, Faculty of Economics and Political Science, Suez University, Egypt. | ||
| Abstract | ||
| The research focused on studying the impact of exchange rate fluctuations on inflation in Egypt, concluding that there is a positive relationship between exchange rates and inflation in many economies. When the exchange rate rises (i.e., when the value of the local currency decreases relative to foreign currencies), imported goods become more expensive, leading to an increase in domestic prices and a rise in the inflation rate. This aligns with the idea that an increase in exchange rates boosts the prices of imported goods, exacerbating inflationary pressures within the economy. The study used the Autoregressive Distributed Lag (ARDL) model, which indicated that the variables would continue to move within a certain range, with the possibility of some variables, such as inflation, rising in certain cases. These forecasts are crucial for making long-term economic and investment decisions, as the results suggest that the economy may face long-term challenges, such as rising inflation. | ||
| Keywords | ||
| Exchange rate; Exchange rate fluctuations; Inflation; ARDL model | ||
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