Exchange rate intervention and trade openness on the global economy with reference to BRICS countries

Desti, Kannaiah, and Murty, T. Narayana (2017) Exchange rate intervention and trade openness on the global economy with reference to BRICS countries. Investment Management and Financial Innovations, 14 (3). pp. 339-352.

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At present the economy of each and every country is trapped in interdependent global economic web. They are mutually dependent on one another’s in imports, exports, fiscal and monitory stability. This brought great challenges and opportunities to the emerging economies. These countries have greater trade openness to the international trading and are more affected by inflation. The BRICS represents about 40 percent of the world population; encompass over 25 percent of the worlds land coverage and comprise huge natural resources. Starting with a share of a little over 10 percent in world Gross Domestic Product (GDP) and less than 4 percent in world trade in 1990, BRICS (with the recent inclusion of South Africa to the forum) now constitutes about 25 percent of world GDP in terms of PPP(Purchasing Power Parity), and 15 percent of world trade. The increase in GDP implies that the economic size of BRICS in terms of its share in world GDP has expanded by 150 percent in the past two decades, and they also estimated that the GDP of these countries may cross 47 percent of the world GDP, and will emerge as strong economic power in the world, and they contribute one fifth of the global economic output. The BRICS economies operate under varied monetary policy frameworks. Brazil and South Africa have inflation targeting regimes, while other countries follow multiple indicator frameworks. There are various other indicators, such as trends in inflows and outflows of foreign direct investment, trade openness, current account balance, forex reserves and economically active labour forces that could make BRICS a formidable force to reckon with in future. But this study uniformly apply exchange rate, Forex reserve and trade openness on the economy (Share Price, Inflation, GDP and Sacrifice Ratio) of BRICS countries.

Item ID: 51702
Item Type: Article (Research - C1)
ISSN: 1812-9358
Keywords: trade, global economy, exchange rate
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This is an Open Access article, distributed under the terms ofthe Creative Commons Attributiion-Non-Commercial 4.0 International license, which permits re-use, distribution, and reproduction, provided the materials aren't used for commercial purposes and the original work is properly cited.

Date Deposited: 03 Dec 2017 22:37
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance @ 50%
14 ECONOMICS > 1499 Other Economics > 149999 Economics not elsewhere classified @ 50%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9199 Other Economic Framework > 919999 Economic Framework not elsewhere classified @ 50%
90 COMMERCIAL SERVICES AND TOURISM > 9099 Other Commercial Services and Tourism > 909999 Commercial Services and Tourism not elsewhere classified @ 50%
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