The Impact of Monetary and Foreign Exchange Policies uncertainty on Investors' Emotional Tendencies

Subject Areas :

mojtaba karimi ¹ , Farideh Sadat Sobhanian ² , Mohammadamin Aliakbari ³

1 - Department of Finance, South Tehran Branch, Islamic Azad University, Tehran, Iran
2 - MSc. In Financial Management, Faculty of Economics and Accounting , Islamic Azad University ,South Tehran Branch, Tehran,Iran
3 - MSc. In Financial Management, Faculty of Economics and Accounting , Islamic Azad University ,South Tehran Branch, Tehran,Iran

Received: 2022-08-09 Accepted : 2022-08-10 Published : 2022-04-21

Keywords: Uncertainty, GMM, Monetary Policy, Foreign exchange policy, investors emotional Tendencies,

Abstract :

The knowledge of whether monetary and financial policy uncertainties are effective on investors' emotional responses or not, gives hope to users and above all investors and financial analysts to achieve a fair price and follow That reasonable return on investment, develop an algorithm to use these variables as an early warning indicator in their decisions. The purpose of the article is to investigate the impact of monetary and currency policy uncertainty on the emotional tendencies of investors in selected stock exchange companies. This empirical study has been investigated using the GMM dynamic panel method for 109 companies admitted to the Stock Exchange and Securities Organization. The fitting results in the period from 2018 to 2019 indicate the positive effect of monetary and financial policy uncertainty on the emotional tendencies of investors, and this positive effect can be attributed to the important role of monetary and financial policy uncertainty in determining prices and explaining returns, especially for Stocks that are export and import oriented. This important issue should be taken into consideration by policymakers in formulating monetary and financial policies, whose purpose is to control the emotional and mass-like behavior of investors.