FREXCH = 51.124836 + .045763*DOD of PRIV - 1.711899*MS
(*Sig T = .0001, .0369)
R2 = .99
It seems from the preliminary results of our study that both of our hypotheses have validity. For all the major debtor countries debt flows of one kind or another are major determinants of the free market exchange rate. In most cases, the same is true for the official exchange rates. For the oil-exporting countries among the major debtor nations, either the changes in the money supply or the consumer price index act as additional determinants of exchange rate variability. For the relatively developed countries of Argentina, Brazil, Korea, and Turkey, the short-term interest rate is also a key determinant of the exchange rate.