Title

Exchange rate fluctuations - impact on local businesses of Pakistan and how the risks can be mitigated

Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

Spring 2019

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Keywords

Foreign exchange rate forecasting, Pakistan Capital market

Executive Summary

This goal of the study is to analyze the influence of currency exchange rate fluctuations on the performance of businesses and stock markets in Pakistan. With the recent fluctuations in the Dollar to Pakistani Rupee Exchange Rate, there has been a lot of discussion surrounding how it would impact the performance of the local businesses. The main question being asked is how the currency fluctuation can impact local business's financial and overall performance and how these fluctuations can have an impact on the capital markets of Pakistan. A major concern is also the confidence of the investors who are looking to invest in the local Pakistani market. I-low does the currency fluctuation affect this investor confidence? This research also explores the options that can be employed by a business to mitigate these currency risks. The research aims to identify the effects of the risk mitigation options that can benefit the financial and overall performance of the business and consequently the financial markets of Pakistan. The mixed methodology has been utilized to explore the outcomes of the study. The quantitative data is collected from surveys questionnaire and 100 employees are selected as sample respondents. For qualitative data, interviews are used, which has been attained based on open-ended interview questions. 3 managers are selected to conduct interviews based on the snowball sampling technique. 4 participants are selected to form up a focus group, which has enabled the collection of qualitative data. Excel and content analysis are used to analyze qualitative and quantitative data. The analysis of quantitative data displays that hypothesis I could be accepted that there is an impact of exchange rate fluctuations on the performance of businesses. The exchange rate fluctuations can be negatively related to existing between the variables. The qualitative analysis supports the fact that the currency exchange rate devaluation can negatively affect the growth of the Pakistani economy.

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