Digital Trade. Currency Fluctuations: An Straightforward Yet Sometimes Ambiguous Perspective On The Behavior Of Short-Term Capital Flows, In Developing Markets

Abstract

The research investigates how developing economies respond to unexpected short-term capital movements through their trade openness while dealing with unstable exchange rates. The central concept, indirect is that enhanced digital infrastructure could assist countries in managing abrupt currency fluctuations with relatively steadier capital flow patterns though this effect is not consistently robust everywhere. Utilizing panel data, from available public records the research develops interaction models to observe how these factors tend to change collectively. The research results show a weak relationship between digital trade openness and currency fluctuations because it decreases the strong response to exchange rate movements but the effect appears weak and irregular. The research findings indicate that digital systems provide limited assistance to nations dealing with unstable worldwide financial markets although the benefits remain uncertain and minimal.