ASYMMETRIC DEPENDENCE BETWEEN EXCHANGE RATE AND COMMODITY PRICES IN GHANA

IF 2 0 ECONOMICS Annals of Financial Economics Pub Date : 2022-05-07 DOI:10.1142/s2010495222500129
C. Archer, Peterson Owusu Junior, A. Adam, Emmanuel Asafo-Adjei, S. Baffoe
{"title":"ASYMMETRIC DEPENDENCE BETWEEN EXCHANGE RATE AND COMMODITY PRICES IN GHANA","authors":"C. Archer, Peterson Owusu Junior, A. Adam, Emmanuel Asafo-Adjei, S. Baffoe","doi":"10.1142/s2010495222500129","DOIUrl":null,"url":null,"abstract":"An increase in globalization and financial integration has induced countries to depend on each other to survive. This has facilitated trade and investments among economies across the globe. It is expected that countries’ international economic activities would contribute to the rate of exchange between the countries. However, uncertainties may alter the dynamics of exchange rate movements, thereby minimizing the contribution of its economic activities at various market conditions. In this regard, we examine the influence of variations in prices of commodities on nominal exchange rate in Ghana. Hence, we employ quantile regression with monthly data spanning from September 2007 to December 2020 for the variables — nominal exchange rate, cocoa, gold and Brent crude oil prices. We find a significant connection among the variables for most quantiles. Also, the study reveals that an upsurge in the price of crude oil corresponds to an appreciation of the Ghana Cedi during turbulent conditions. Conversely, cocoa price tends to appreciate the Ghana Cedi for both normal and extreme market conditions. We recommend that for the country to enjoy favorable exchange rate at all market conditions, there is a need for the producers of these exported commodities to be incentivized by the government in the form of subsidies, new technological equipment and education in order for the producers to increase their efficiency and add value to these commodities while effective inflation targeting policies are deployed. Implications for the study are further provided.","PeriodicalId":43570,"journal":{"name":"Annals of Financial Economics","volume":" ","pages":""},"PeriodicalIF":2.0000,"publicationDate":"2022-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"8","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Annals of Financial Economics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1142/s2010495222500129","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"0","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 8

Abstract

An increase in globalization and financial integration has induced countries to depend on each other to survive. This has facilitated trade and investments among economies across the globe. It is expected that countries’ international economic activities would contribute to the rate of exchange between the countries. However, uncertainties may alter the dynamics of exchange rate movements, thereby minimizing the contribution of its economic activities at various market conditions. In this regard, we examine the influence of variations in prices of commodities on nominal exchange rate in Ghana. Hence, we employ quantile regression with monthly data spanning from September 2007 to December 2020 for the variables — nominal exchange rate, cocoa, gold and Brent crude oil prices. We find a significant connection among the variables for most quantiles. Also, the study reveals that an upsurge in the price of crude oil corresponds to an appreciation of the Ghana Cedi during turbulent conditions. Conversely, cocoa price tends to appreciate the Ghana Cedi for both normal and extreme market conditions. We recommend that for the country to enjoy favorable exchange rate at all market conditions, there is a need for the producers of these exported commodities to be incentivized by the government in the form of subsidies, new technological equipment and education in order for the producers to increase their efficiency and add value to these commodities while effective inflation targeting policies are deployed. Implications for the study are further provided.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
加纳汇率与商品价格的非对称依赖性
全球化和金融一体化的加剧促使各国相互依赖以生存。这促进了全球经济体之间的贸易和投资。预计各国的国际经济活动将有助于提高各国之间的汇率。然而,不确定性可能会改变汇率变动的动态,从而最大限度地减少其经济活动在各种市场条件下的贡献。在这方面,我们研究了加纳商品价格变化对名义汇率的影响。因此,我们对2007年9月至2020年12月的月度数据——名义汇率、可可、黄金和布伦特原油价格——进行了分位数回归。我们发现大多数分位数的变量之间存在显著的联系。此外,研究表明,原油价格的飙升与加纳Cedi在动荡条件下的升值相对应。相反,在正常和极端的市场条件下,可可价格往往会升值。我们建议,为了使该国在所有市场条件下都能享受有利的汇率,政府需要以补贴的形式激励这些出口商品的生产商,新的技术设备和教育,以便生产商在部署有效的通胀目标政策的同时提高效率并为这些商品增值。进一步提供了对该研究的启示。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
CiteScore
6.60
自引率
55.00%
发文量
30
期刊最新文献
How Do Remittance Inflows Cause the Dutch Disease in the Financial Sector? The Role of Financial Risk and Human Capital Factors Affecting the Crude Oil Prices Volatility: A Case Study of the USA, China, Japan, Germany and India The Emerging Stock Markets and Their Asymmetric Response to Infectious Disease Equity Market Volatility (ID-EMV) Index Greenhouse Gas Emissions and the Rising Effects of Renewable Energy Consumption and Climate Risk Development Finance: Evidence from BRICS Countries Potential Welfare Gains from Optimal Macro Hedging for Oil Exporters
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1