Socioeconomic and Religious Tension Mitigate Exchange Rate: Empirical Evidence from Pakistan

Abstract

The study investigated the socioeconomic and religious tension effect on the exchange rate of Pakistan. As well as ethnic tension, law and order, political and government stability. For this purpose, use time series data and time period 1996-2017. The econometric approach ARDL and NARDl approaches are used. The study findings, Socioeconomic conditions, government, political stability, and law and order are positive and statistically significant. Thus, the religious and ethnic factors are also negative and statistically significant. In the case of NARDL, the projected variables are positive and negative, with a significant impact on the exchange rate of Pakistan. The study suggests the government and political stability of the state. As well as reduce ethnic and religious issues in appropriate ways, such as by increasing religious education and declining ethnic hatred.