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Impact of Exchange Rate Volatility on Economic Growth: Evidence from Selected OIC Countries

Aftab Alam et al.

Asian Academy of Management Journal of Accounting and Finance2025https://doi.org/10.21315/aamjaf2025.21.2.6article
ABDC C
Weight
0.50

What the paper says

This study examines how exchange rate volatility (ERV) impacts economic growth in 18 Organisation of Islamic Cooperation (OIC) countries (1985–2022) through direct and indirect channels. Using the CS-ARDL model and Dumitrescu-Hurlin causality tests, we analyse ERV’s effects via inflation, FDI, external debt, trade, and financial development. Results show ERV significantly reduces long-term growth directly via uncertainty and indirectly through key determinants. While FDI, trade, and financial development support growth, inflation and external debt amplify ERV’s negative effects. Robustness checks (CCEMG and AMG estimators) confirm these findings. OIC policymakers should implement OIC-wide local-currency swap networks and Sharia-compliant hedging instruments (wa?d-based forwards, mur?ba?ah swaps), strengthen Islamic money markets, and adopt inflation control with local-currency trade invoicing to mitigate ERV while boosting growth.

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https://doi.org/https://doi.org/10.21315/aamjaf2025.21.2.6

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@article{aftab2025,
  title        = {{Impact of Exchange Rate Volatility on Economic Growth: Evidence from Selected OIC Countries}},
  author       = {Aftab Alam et al.},
  journal      = {Asian Academy of Management Journal of Accounting and Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.21315/aamjaf2025.21.2.6},
}

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Impact of Exchange Rate Volatility on Economic Growth: Evidence from Selected OIC Countries

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 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.