Exchange rate volatility in Bangladesh negatively impacts money demand function.
The study looked at how exchange rates and their uncertainty affect the demand for money in Bangladesh from 1999 to 2018. They used tests to check the data and found that income and interest rates increase money demand in the long run. However, exchange rates and their volatility decrease money demand in the long run. In the short term, income, exchange rates, and their volatility have a positive but insignificant impact on money demand, while interest rates have a negative and insignificant effect.