How well does the Uncovered Interest Parity Hold during Times of Uncertainty for the CHFNOK Exchange Rate ?

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Published: 2023-07-04

DOI: 10.56557/jgembr/2023/v15i38295

Page: 15-25


Eric Aboagye

University of Stavanger, Norway.

Taha Atallah

University of Stavanger, Norway.

N. Emma Frigard

University of Stavanger, Norway.

Williams Odiche *

University of Stavanger, Norway.

*Author to whom correspondence should be addressed.


Abstract

The work analyzes the validity of the uncovered interest rate parity [UIP] theory during times of uncertainty in explaining the movement of the Norwegian kroner with the Swiss Franc. We used daily, monthly, and quarterly data from the periods 2003 to 2021 to capture the findings. The data used for the study were short-term rates and government bond yields for the two countries' databases and analyzed using descriptive statistics and regression analysis. The result of the study revealed that the Norwegian kroner appreciates when its interest rate increases over the Swiss franc interest rate. This further suggests that our results from the entire period, including periods of uncertainty, affirm that UIP cannot determining the exact value of the Norwegian kroner compared to the Swiss franc.

Keywords: CHF, NOK, interest rates, regression


How to Cite

Aboagye , E., Atallah , T., Frigard , N. E., & Odiche , W. (2023). How well does the Uncovered Interest Parity Hold during Times of Uncertainty for the CHFNOK Exchange Rate ?. Journal of Global Economics, Management and Business Research, 15(3), 15–25. https://doi.org/10.56557/jgembr/2023/v15i38295

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