How has Covid-19 infected the stock market and exchange rate? (A case study of infected vs. uninfected countries)
by Faishal Fadli; Vietha Devia Sagita Sumantri
International Journal of Monetary Economics and Finance (IJMEF), Vol. 15, No. 5, 2022

Abstract: The Covid-19 pandemic has hit the stock market and exchange rates in the infected countries. By using the Difference in Difference method, the Event Study method and ordinary least square (OLS), this research has analysed the impact of Covid-19 on the stock market and exchange rate in the infected countries specified in this research. The result is a positive relationship between the cumulative new cases of Covid-19 and the exchange rate. The exchange rate depreciation in the countries infected by Covid-19 occurred after the countries announced the first case of Covid-19, except for in UK. For the countries that were not infected by Covid-19, they experienced an appreciation of the exchange rate. The price of the composite stock index decreased when the first case of Covid-19 was announced. There is a negative relationship between cumulative new cases of Covid-19 and the composite stock index prices, except for in China. The number of global cases of Covid-19 has a negative relationship with the world oil price. However, there is a positive relationship with the world gold price.

Online publication date: Tue, 24-Jan-2023

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