Exchange Rate Volatility and Growth Dynamics: Evidence from Selected Sub-Saharan African Countries

Onwuka, Kevin O.; Kenneth, O.

doi:10.9734/bjemt/2015/12308

Cited by 4 publications

(3 citation statements)

References 36 publications

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“…The study by Doroodian ( 1999 ), which includes India in its scope, found that exchange rate volatility had a negative impact on Indian real exports to other countries. The same negative effects were confirmed by Mukhtar and Malik ( 2010 ), and Srinivasan and Kalaivani ( 2012 ). The three studies were biased in another way even though they only used time-series data because they also include information on India's exports to other countries.…”

Section: Literature Reviewsupporting

confidence: 71%

Exchange rate volatility and India–US commodity trade: evidence of the third country effect

2023

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The relationship between trade flows and exchange rate uncertainty is still being debated in academic circles while examining the effects of exchange rate uncertainty on India's bilateral trade flows, prior research disregard the “third-county” effect. This study investigates the effect of third-country risk on the amount of India–US commodity trade using time series data for 79 Indian commodity export and 81 Indian commodity import businesses. The results show that the volume of trade in a select few industries is considerably impacted by third-country risk in terms of dollar/yen and rupee/yen. According to the findings, rupee–dollar volatility affects 15 exporting industries in the short run and 9 industries in the long run. Similarly, the third country effect demonstrates that Rupee–Yen volatility affects 9 Indian exporting industries both in the short and long run. The results show that rupee–dollar volatility tends to have a short-term impact on 25 importing industries and a long-term impact on 15 sectors. Similar to this, the third country effect demonstrates that Rupee–Yen volatility tends to have an impact on 9 Indian importing industries over the short and long term.

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Section: Literature Reviewsupporting

confidence: 71%

Exchange rate volatility and India–US commodity trade: evidence of the third country effect

2023

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“…Rationing and parallel market premia became a thing of the past and their per capita income increased tremendously. Onwuka and Obi (2015) examine the relationship between the real exchange rate volatility of Nigeria and the G-3 countries, and economic growth in 6 selected sub-Saharan African countries (Nigeria, Kenya, Ghana, Mali, Malawi, and Zambia) using quarterly data from 1980Q1 to 2013Q4. They employ the Kao and Johansen-Fisher combined cointegration test and the fully modified OLS (FMOLS) of Philips and Hansen to determine the long-run relationship between variables.…”

Section: Empirical Studiesmentioning

confidence: 99%

“…Many researchers have empirically investigated the effects of currency devaluation on output in both developed and developing economies, but their empirical findings remain mixed and controversial. Whereas some studies find devaluation effects to be expansionary (Maehle et al (2013) for Ghana, Kenya, Malawi, Mozambique, Tanzania, Uganda, and Zambia; Brixiona and Ncube (2014) for Zimbabwe; Klau (1998) for the Communauté Financière Africaine (CFA) and non-CFA countries), others find devaluation effects to be contractionary Fouopi (2012) for CFA countries; Kamal (2015) for 33 developed and developing countries; Pal (2014) for India; Alawin et al (2013) for Jordan; Onwuka and Obi (2015) for Nigeria, Ghana, Kenya, Malawi, Zambia, and Mali;Miteza, (2006) for Poland, Hungary, Czech Republic, Slovakia, and Romania). Studies by Ayen (2014) for Ethiopia, Alemu (2014) for 14 Asian countries, and Datta (2012) for Pakistan, to mention but a few, find mixed results.…”

Section: Introductionmentioning

confidence: 99%

The asymmetric effects of currency devaluation in selected sub-Saharan Africa

Chukwudi

Okechukwu

2021

EKON ANAL

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Economic activities in many sub-Saharan African (SSA) countries have weakened markedly in the last few years, with deterioration in trade balances, increasing foreign reserve depletion, and exchange rate depreciation. This situation has led to a call by the International Monetary Fund for more flexible exchange rate adjustment and even currency devaluation to reverse the economic downturn. This call for devaluation has generated controversy among economists and policymakers in these countries and has revived the need to study the effects of devaluation on economic output in SSA countries. This study therefore examines the asymmetric effects of currency devaluation as a policy shift on economic output between 1980 and 2019 in six selected SSA countries, namely Ghana, Kenya, Tanzania, Mozambique, Nigeria, and Malawi. The study employs the smooth transition regression (STR) model to determine the relative asymmetric responses of economic output to devaluation and nondevaluation regimes. The results of STR are mixed, as devaluation asymmetrically impacts positively and significantly on economic output in Ghana, Kenya, Tanzania, and Mozambique, but is insignificant in the case of Nigeria and Malawi. This mixed result suggests that the impact of currency devaluation on economic output differs across countries depending on the structure and size of the economy, the nature of goods produced, and the supportive policies in place, among other things. The policy implication of the findings is that policymakers in various countries should understand the peculiarity of core macroeconomic variables in order to design and implement robust policies.

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Threshold-based asymmetric reactions of trade balances to currency devaluation: fresh insights from smooth transition regression (STR) model

Odionye

Odo

Ikpe³

et al. 2023

International Review of Applied Economics

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Exchange Rate Volatility and Growth Dynamics: Evidence from Selected Sub-Saharan African Countries

Cited by 4 publications

References 36 publications

Exchange rate volatility and India–US commodity trade: evidence of the third country effect

Exchange rate volatility and India–US commodity trade: evidence of the third country effect

The asymmetric effects of currency devaluation in selected sub-Saharan Africa

Threshold-based asymmetric reactions of trade balances to currency devaluation: fresh insights from smooth transition regression (STR) model

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