Relations among balance of payments, exchange rate and foreign reserves

The bachelor thesis is focused on the relations among the balance of payments, exchange rate and foreign reserves in period from 1999 to 2009 in the Czech Republic. The first part presents the theory behind the balance of payments, exchange rates and foreign reserves. The analysis of each variable was performed by using both graphical interpretation and regression analysis. The time-series consisted of quarterly data. Lagged values were used to improve the describing power of econometric models. The models themselves were analyzed bilaterally by using OSL method. The results show that the exchange rates have higher influence on the balance of payments than vice versa