The Factors Affecting the Interest Rates: The Example of Fragile Five Countries

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Gazi İktisat ve İşletme Dergisi

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This study aims to investigate the effects of USD Dollar exchange rates (hereafter exchange rates), stock prices, gold prices, and crude oil prices, which are considered to be in financial and macroeconomic interaction, on interest rates. The interaction between the variables with fixed and random effect panel logit models was estimated and then analyzed. The analysis covers Brazil, India, Indonesia, Turkey, and South Africa, which are called as “The Fragile Five” for the 2016-2020 period. According to empirical evidence of the study, it was found that stock prices, gold prices, and crude oil prices are remarkably associated with the interest rates of the Fragile Five. More specifically, in both predicted models, it is revealed that the stock prices and gold prices have a negative impact on the interest rates, while oil prices and exchange rates have a positive impact.


Anahtar Kelimeler

Panel qualitative choice models, Fragile five countries, Financial determinants of interest rates, Interest rates


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Gazi İktisat ve İşletme Dergisi, 2021; 7(2): 122-132