Predicting Indian Foreign Exchange Market Crashes through Log-Periodic Power Law
Published: 2020
Author(s) Name: Varun Sarda, Yamini Karmarkar and Neha Lakhotia |
Author(s) Affiliation: Assistant Professor, Prestige Institute of Management and Research, Indore, Madhya Pradesh
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Abstract
A sudden crash in the foreign exchange
market can wipe out a lot
of value for the investors in the
market. The present study analyzes
crashes in the Indian foreign exchange
market using Log-Periodic
Power Law during1997- 2011.The
fall in prices in Indian foreign exchange
market is less than required
due to the fact that, though there is
full current account convertibility,
there still are restrictions on capital
account convertibility. Further,
the Central Bank intervenes in the
foreign exchange market to influence
the exchange rate of Rupee.
Log-Periodic Power Law will be
more applicable in a situation where
there will be no restrictions and controls
on exchange rate determination.
Keywords: N.A.
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