Economic Sociology: Impact of Foreign Debt, Remittances, Trade Balance, Exchange Rate, and FDI on Bangladesh’s Foreign Exchange Reserves
Md. Aminul Islam et al.
What the paper says
This study investigates the determinants of Bangladesh’s foreign exchange reserves (1976–2024), focusing on trade balance, external debt, remittances, FDI, and exchange rates. Employing time-series econometrics, we conduct stationarity tests (ADF), cointegration analysis (Johansen), and Granger causality tests. Key findings reveal that remittances, foreign debt, and trade balance positively influence reserves, while exchange rates exhibit a negative impact, and FDI shows negligible effects. Vector Error Correction Modeling (VECM) highlights equilibrium adjustments in exchange rates, remittances, and debt, whereas trade balance and reserves display weak long-term convergence. Bidirectional causality emerges between remittances and exchange rates, and impulse response analysis underscores the persistent effects of trade balance shocks. The paper concludes with policy recommendations to enhance reserve stability.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.