Ibrahim Mohamed Ibrahim
SIMAD University ibrahimkhaliil@yahoo.com Abstract
The purpose of this study was to examine the determinants of the exchange rate this study was set to analyze the Exchange Rate determinates in Somalia in due to 2011. There are two factors that are assumed to have strong relations with exchange. Descriptive and regression analysis was used to draw up the satisfactory conclusion. SOS-1 and SOS-2 were determinants of exchange rate. The findings of this study showing that Somalia exchange rate is strongly affected by the above mentioned factor. This can observed from R squared that indicates 96% of the variation in exchange rate is explained by variation in independent variables. Speculators should eye on these factors to minimize the exchange fluctuation.
Key words: exchange rate, SOS-1, SOS-2
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1: INTRODUCTION
1.1 Introduction to the variables
The exchange rates of the world are so different according to nation’s currency and the ways exchange rate works or operates are different from other exchange rate markets depend on more factors like spot rates. Exchange rate plays a crucial role in exchange rate markets and all brokers or speculators needs to know how the daily exchange rates are operating in market rate. In this will have the following section? A section on the independent variables of this study will be presented. 1.1.1 SOS-1
Somali shilling-1 means yesterday and it has an effect for the day before every day exchange rate and Somali shilling cope with different currencies such as USD (US dollar), pound, riyal, Kenya shilling and also Ethiopian currency if the Somali shilling of today is $1= SOS 22, it may was yesterday went up or down. 1.1.2 SOS-2
Somali shilling-2 means the day before yesterday and deal with different world currencies