Is Emergence of the Exchange Future Market a Stabilizing Factor in Iran’s Financial Market

Movements in Iran‘s Exchange market reveal the fact that numerous fluctuations in the market have been the results of government intervention, wrong decisions made by the monetary authorities, existence of structural economic problems and strong speculation. Hence, the performance of the market has been always destabilizing andinefficient, while a financial alternative could assist the exchange market for adjusting fluctuations. The objective of this paper is to evaluate the possibility of the exchange future market establishment, as a stabilizing and efficient factor, using time series data of exchange ratesas well as dynamic econometric methods (Unit Root and Cointegration tests) in the period 1996-2010. The empirical results confirm that the Iranian exchange market is in a class of weak efficiency, being faced with periodic fluctuations. The implication is that a possible establishment of the exchange future market in Iran could lead towards stitutionalizing rational expectations while controlling for speculative activities.

کلیدواژه ها:

Exchange future market ، exchange rate ، weak efficiency ، semi-strength efficiency ، time series models