Impact of Exchange Rate and Inflation on Foreign Indirect Investment

Abstract

Key Interest of this studied is to discover the impact of Foreign indirect investment on the exchange rate. Focus was to check that how change exchange rate affects the foreign investors to invest in Stock market of Pakistan. Find out the vulnerability of foreign indirect investment also known as foreign portfolio investment Data of past five years (2012-2016) is analyzed in the study. Correlation, regression and t-test are applied to understand the relation between the independent variable Exchange rate and Dependent variadle Foreign indirect investment. Results showed positive relation on both variables over the past five years. FPI is dependent on various variables but Exchange rate is a very essential factor. Nowadays conversion scale is exceptionally unstable because of open overabundance of the organizations and speculators in both the household and global money related market. This instability in the trade is extremely impressive for outside speculators.