چکیده:
Several political and economic factors are involved in choosing exchange rate policy in Organization of Islamic Cooperation (OIC) countries. In the present study, these factors have been investigated with an emphasis on OCA and political economic factors during 1990 -2014. The result shows that OCA and political economic factors as well as tradable sector are influential on exchange rate policy in OIC countries. In a way that oil revenue, financial development, GDP, openness of the economy, economic development and political instability all tend to increase the probability of pegging the exchange rate regimes, whereas an increasing industrial sector and size of the economy lead to a decrease in the probability of pegging the exchange rate regimes. Inflation, democracy, political system, legislative system, and monetary crises had no significant effect on the exchange rate regime. Also, the results show that the democracy and oil revenue had the highest impact on choosing exchange rate regime and financial development and monetary crises risk had the least impact on choosing exchange rate regime.
خلاصه ماشینی:
The result shows that OCA and political economic factors as well as tradable sector are influential on exchange rate policy in OIC countries.
In a way that oil revenue, financial development, GDP, openness of the economy, economic development and political instability all tend to increase the probability of pegging the exchange rate regimes, whereas an increasing industrial sector and size of the economy lead to a decrease in the probability of pegging the exchange rate regimes.
Recent body of work by Cholin (1998), Edvards (1996), Frieden, Ghezzi, and Stein (2001), and Estien (2005) indicated that political economy wielded a great weight upon exchange rate regime choice in developing countries.
In the present study, the determinants of exchange rate policy have been empirically examined using models based on the theory of Optimal Currency Areas (OCA), political economic factors, tradable sectors and currency crisis risk.
Also, size of the economy, inflation, capital mobility, production diversification, adequacy of reserves, and external vulnerability had a significant effect on exchange rate regime, consistent with OCA and political economic predictions.
The findings indicated that exchange rate regime determination is affected by political and institutional factors, and interest group variables (such as different financial sectors and trade liberalization).
In general, exchange rate regime determinants fall into four categories: a) OCA factors b) Monetary crisis risks c) Political economy; and, d) Tradable sectors.