Forecasting foreign exchange rate: Use of FbProphet

Foreign exchange rate prediction can be considered crucial in today's world. The exchange rate of a country plays a vital role in its economic growth. The Central Bank of a country holds the authority in managing the exchange rate and its policies. The study predicts the foreign exchange rate of American Dollar to Sri Lankan Rupee using FbProphet model; a time-series forecasting model developed and introduced by Facebook. The daily exchange rate values for USD/LKR were obtained and the values are predicted for another twenty-four months starting from November 2020. R Squared value is calculated to verify the fitting of the model and the value is 0.98, which indicates that the model for prediction very well fits for the data set used. And further, Mean Squared Error and Mean Absolute Error are calculated to measure the performance of the model. These metric measurements show that the model is appropriate for the data set which has been selected for the research study.