Global Journal of Management and Business Research, C: Finance, Volume 19 Issue 6

Wald Test: System: %system Test Statistic Value d/f Probability Chi-square 4.890965 2 0.0867 Null Hypothesis: C(2)=C(4)=0 Null Hypothesis Summary: Normalized Restriction (= 0) Value Std. Err. C(2) 0.453830 0.227491 C(4) -0.029163 0.053320 We use the equation number six for wald test to determine whether the joined variables have short run causality or not to explain the dependent variable. The result from C (2) and C (4), coefficients of REMIT and INTTRADE signifies that there are short run relations at 5% significance level. Because the P value is greater than 5%. Wald Test: System: %system Test Statistic Value Df Probability Chi-square 4.352429 2 0.1135 Null Hypothesis: C(2)=C(3)=0 Null Hypothesis Summary: Normalized Restriction (= 0) Value Std. Err. C(2) 0.453830 0.227491 C(3) 0.029428 0.111789 The result from C (2) and C (3), coefficients of REMIT and GDPG signifies that there are short run relations at 5% significance level. Because the P value is greater than 5%. i) Ganger causality test statistics Here, the decision depends on probability. If the P value less than 5% then we can tell that that independent variables affects dependent variable. Here, we can see that the LREMIT(Remittances received) and LINTTRADE (International trade) significantly affect the REER (real effective exchange rate) at 5% significant level. j) Analysis of Variables Affecting Real Effective Exchange Rate FMOLS The johansen co-integration test helps to detect the long run and short run relationship between variables according to test results. But the severity and the direction is tested by associating the fully modified ordinary least square (FMOLS) test statistics by Phillips LREMIT does not Granger Cause LREER 30 4.70589 0.0390 LREER does not Granger Cause LREMIT 11.6294 0.0021 LGDPG does not Granger Cause LREER 30 2.20910 0.1488 LREER does not Granger Cause LGDPG 0.50224 0.4846 LINTTRADE does not Granger Cause LREER 30 5.31615 0.0290 LREER does not Granger Cause LINTTRADE 4.95205 0.0346 LGDPG does not Granger Cause LREMIT 30 1.69732 0.2036 LREMIT does not Granger Cause LGDPG 5.50706 0.0265 LINTTRADE does not Granger Cause LREMIT 30 0.48273 0.4931 LREMIT does not Granger Cause LINTTRADE 3.44885 0.0742 LINTTRADE does not Granger Cause LGDPG 30 7.41094 0.0112 LGDPG does not Granger Cause LINTTRADE 0.72710 0.4013 © 2019 Global Journals Factors Influencing Exchange Rate: An Empirical Evidence from Bangladesh 22 Global Journal of Management and Business Research Volume XIX Issue VI Version I Year 2019 ( ) C Null Hypothesis: Obs F-Statistic Prob.