Exchange Market Pressure, Government Debt, US Money Supply, GDP Growth and Maritime Trade: An Empirical Evidence from India

Abstract

Exchange Market Pressure (EMP) indices are used as comprehensive indicators of pressure on a currency. This paper examines the relationship of India government debt, India’s GDP, world money supply and world GDP with exchange market pressure in India. We use quarterly data from 1992: II to 2018: III. The results suggest a significant positive relationship between EMP and the India government debt and GDP and a negative relationship between EMP and world money supply. The relationship between EMP and world GDP is found to be insignificant. This study sheds light on the complex dynamics of EMP and its determinants in India, highlighting the impact of key economic factors and historical events on currency stability. These findings have important implications for policymakers and stakeholders in maritime trade, providing insights into the economic factors influencing currency stability in maritime trade.