Abstract – AOCRJ-V5I1P5

Analyzing the Effects of Value of Dollar Against the
Euro on Prices Index in Tehran Stock Exchange

Chidam Chitakoglu
Department of Accounting and Finance, Khameneh Branch,
Islamic Azad University Khameneh, Iran,

Abstract:
Here in, the effect of changing the rate of dollar against euro which led to an imbalance in the oil market, changes in demand for crude oil, and consequently led to changes in oil prices and oil revenues had been studied. When the value of dollar falls against euro, it leads to increase in the European countries demand for oil and consequently leads to increase in oil prices and the revenues of oil producing countries in long term.
Greater supply of dollars in the domestic market leads to increases in domestic value of the currency. Increase the value of domestic currency reduces the price of imports relative to domestic goods and leads to in the volume of imports and hence a domestic manufacturer are having difficulty selling their products and reduce the volume of the production and ultimately leads to the reduction in the profit of domestic manufacturers and stock price index. On the other hand, due to the fact that there is no risk in long term deposits in the bank, this is a competitor for capital investment in the stock market. The aim of this paper is the Analyzing the effects of long-term banking profit and value of the dollar against the euro on prices Index in Tehran Stock Exchange using Seasonal time series data between 2001-1 2009-4. The result indicates that, reduction in the value of dollar against euro has negative and significant impact on stock price index. The long-term bank deposit interest rate has significant and negative impact on price index.

Key Words: Tehran Stock Exchange, Price Index, Long term Interest, Against the Euro, Co-Integration.

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