Abstract
The impacts of the COVID-19 pandemic on economies are different, however financial markets followed a similar pattern. This paper investigates the preliminary effect of the pandemic on China’s stock exchange market and foreign exchange market by comparing the pre-pandemic and post-pandemic periods. The results indicate that there is a significant interaction between two markets and both markets do not behave randomly. This linkage is crucial to determine the macroeconomic policies against a random walk. We investigate that the monetary policy interventions have positive effect to increase efficiency of financial markets. Moreover, financial markets do not follow a random walk path. It can be said that now, China’s money market in an upward trend due to the relatively reduce in uncertainty and pessimist expectations.
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