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

Chukwudi, Joseph Odionye; Okechukwu, Jude Chukwu

doi:10.2298/eka2130135o

Cited by 7 publications

(2 citation statements)

References 14 publications

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“…This situation has led the International Monetary Fund to call for more flexible exchange rate adjustments and even currency devaluation to reverse the economic downturn. Odionye et al (2021) examined the asymmetric effects of currency devaluation on policy shifts in economic output between 1980 and 2019 in six selected SSA countries, namely Ghana, Kenya, Tanzania, Mozambique, Nigeria, and Malawi. The study employs a smooth transition regression (STR) model to determine the relative asymmetric response of economic output to depreciating and non-depreciating regimes.…”

Section: Empirical Reviewmentioning

confidence: 99%

Impact of Currency Devaluation on Economic Growth: Evidence from Pakistan

Khan¹,

Khan

Wei

et al. 2022

JMS

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This study examines the impact of currency devaluation on Pakistan's economic growth. Currency devaluation is controversial topics for both developing and developed economies to believe and hope to improve economic growth. In this study, the model used to find the cointegration between variables. The annual time series data over1990 to 2018, together with ARDL model and Johansson cointegration model used to test whether there is a long-run relationship between economic growth and currency devaluation. Both proposed models indicate that the devaluation of Pakistan’s currency has no significant impact on the long-run changes in economic growth. However, Interest rates and gross capital formation are positive correlated with economic growth in the long run. Currency devaluation is a cure for balance of payment, enhances the competitiveness of the international market and promotes trade balance. Due to some political instability, macroeconomic and environmental conditions in a country, cure is sometimes worse than disease. The paper recommends making the Pakistan economy a sustainable, easy and friendly business environment and looking closer at the economic indicators to make Industrial economic policy. Government must make a good policy for industrialization, instead of currency devaluation, Pakistan industrial sector has a potential to improve the economy, and the authorities should need to create an easy and friendly environment for foreigner business and investors. In addition, allow currency freely to depreciate through market force and efficient money market system, official’s devaluation should be discouraged.

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Section: Empirical Reviewmentioning

confidence: 99%

Impact of Currency Devaluation on Economic Growth: Evidence from Pakistan

Khan¹,

Khan

Wei

et al. 2022

JMS

View full text Add to dashboard Cite

show abstract

“…

Since the currency value determines in relation to the value of the United States dollar, a devaluation of a currency will result in a reduction in the amount of dollars required to purchase one unit a rise in the value of the foreign currency relative to the dollar, or, equivalently, an increase in the value of one US dollar relative to other currencies (Sahil, 2015). When a currency loses value in relation to the dollar, it also loses value in relation to the global payments system, which means it loses value in relation to every other currency (Odionye, & Chukwu, 2021). Only other currency.

…”

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confidence: 99%

Effect of Currency Devaluation in Pakistan: A Prospect of Short Term and Long Term

Amin,

Shumaila Hashim

2023

AMSJ

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Currency devaluation is a standout amongst the most emotional even awful proportions of financial strategy that a legislature may attempt It generally creates cries of shocks and Sustainable economic growth and development is undoubtly, one of the most challenging development issue, nowadays, in the developing countries Therefore, this study investigates theoretically and empirically the impact of currency devaluation on economic growth of Pakistan The study finds evidence of non-linearity in this relationship and capture that through a smooth transition regression model. Using annual data for the period 1975-2018, employing ARDL bounds test. From an evaluation of the overall analysis and results, it is concluded that foreign exchange reserves have positive and significant short run effect for all the countries. Inflation has negative and significant effect on economic growth of all the countries while real exchange rate has also positive and significant effect on economic growth. The government spending on development has positive and significant effect in short run scenario for all the selected countries while the money growth have positive and negative but significant effect on different countries depending on the political situation and economy based on agrarian product or industrial products. The results of this study confirm the finding of most previous study, since the advent of the exogenous growth theory. The study suggests that all the variables e.g. inflation, foreign exchange reserves, real exchange rate, money growth and government spending could be effectual in these augmenting economies.

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The role of International Financial Institutions in conflict, recovery, and transitions in Africa: a focus on Ethiopia and Sudan

Kifle,

Olonisakin

2023

China Int Strategy Rev.

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Successive socio-economic shocks in the past three years have undermined Africa’s development gains, impeding the economic convergence of Africa and the developed world. While these shocks originated externally, internal factors within Africa are reinforcing their impact. One such factor is conflict and instability. Nearly half of the African states are either fragile or conflict-affected. Although international organizations claim to support Africa in overcoming fragility and conflict, how they engage Africa has remained a major policy and scholarly concern. International Financial Institutions (IFIs), for instance, are being asked to help address the economic dimensions of fragility and conflict. However, there is little consensus about whether they are indeed helping. Divergent responses are often offered wherein the IFIs argue that they are assisting by adopting adaptive strategies to correct past mistakes while experimenting with new strategies based on extensive monitoring and research. Scholarly debates on these IFI narratives, and by extension the IFIs’ interests and agenda, are not yet settled. This paper approaches these debates by examining IFIs’ engagement in the recent conflict and transitions of Ethiopia and Sudan, arguing that these examples call into question the IFIs’ claims of strategic adaptiveness. The paper, along with previous studies, argues that the inner core of neo-liberal economic vision has animated the IFIs’ prescription, often complemented by a focus on social safety nets to varying degrees and with varying effects. In Sudan, the IFI offered coordinated support for economic reform with some successes in directly targeting sources of fragility and conflict. In Ethiopia, such coordinated engagement was lacking, and reform measures did not directly target the sources of conflict. The cases demonstrate the importance of continuous and coordinated engagement in fragile and conflict-affected states (FCS) of Africa in a way that acknowledges the nexus between security and development issues, especially at critical junctures. The cases also underscore the importance of adaptive and pragmatic engagements with FCS undertaken in coordination with relevant global actors and institutions.

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

Cited by 7 publications

References 14 publications

Impact of Currency Devaluation on Economic Growth: Evidence from Pakistan

Impact of Currency Devaluation on Economic Growth: Evidence from Pakistan

Effect of Currency Devaluation in Pakistan: A Prospect of Short Term and Long Term

The role of International Financial Institutions in conflict, recovery, and transitions in Africa: a focus on Ethiopia and Sudan

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