Forecast Foreign Exchange Rate: The Case Study of PKR/USD

  • Muhammad Asadullah PhD, Lecturer, IoBM, Karachi, Pakistan
  • Nawaz Ahmad PhD, Assistant Professor, IoBM, Karachi, Pakistan
  • Maria José Palma Lampreia Dos-Santos Assistant Professor, ISCTE- University Institute of Lisbon, ESCS-IPL, Lisboa, Portugal

Abstract

The main aim of this paper is to forecast the future values of the exchange rate of the USD. Dollar (USD) and Pakistani Rupee (PR). For this purpose was used the ARIMA model to forecast the future exchange rates, because the time series was stationary at first difference.  Data reported to five years ranging from the first day of April 2014 to 31st March 2019. The results proved that ARIMA (1,1,9) is the most suitable model to forecast the exchange rate. The difference between the forecasted values and actual values are less than 1%; therefore, it was found that the ARIMA is robust and this model will be helpful for the government functionaries, monetary policymakers, economists and other stakeholders to identify and forecast the future trend of the exchange rate and make their policies accordingly.

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Published
2020-07-10
How to Cite
Asadullah, M., Ahmad, N., & Dos-Santos, M. J. P. L. (2020). Forecast Foreign Exchange Rate: The Case Study of PKR/USD. Mediterranean Journal of Social Sciences, 11(4), 129. https://doi.org/10.36941/mjss-2020-0048
Section
Articles