According to the results, The best Model economic indicators was Model III which showed
highest R2 was 0.860 which explains that 86 percent of the variation in the exchange rate explained by
the variability in economic indicators. This showed that there was a negative relationship between the
two variables. The variables in Model III were forward position (bought), balance of payment, and
international reserves were taken as an independent variable while exchange rate was taken as a
dependent.