The relationship between the real exchange rate and capital account: The Case for South Africa
Abstract
This paper examines the relationship between the rand exchange rate and South Africa’s capital account. Results we obtained from the autoregressive distribution lag (ARDL) framework suggest that while there is no short run causality between real exchange rate and capital account, in the long run, capital account Granger cause real exchange rate. We interpret our results to suggest that capital inflow play an important role in explaining the dynamic changes in South African rand. Our finding has important policy implication.
Fields of Study & Subjects
Monetary Policy and Economic Impact
Global Financial Crisis and Policies
Economic Theory and Policy
Publication details
- Journal / source
- Magna Scientia Advanced Research and Reviews
- Volume
- 16
- Issue
- 1
- Pages
- 077–081
- Publication date
- 30 January 2026