Discussion Paper No. 10 of 2001 on Kenya's Exchange Rate Movement in a Liberalized Environment: An Empirical Analysis
View/ Open
Publication Date
2000Author
Type
KIPPRA Publicationsviews
downloads
Metadata
Show full item recordBy
Were, Maureen ; Deda, Alemayehu & Ndungu, Njuguna S.
Abstract/ Overview
With globalization has come increased emphasis on an outward- looking and a market-oriented economy. Consequently, the 1990s were associated with a greater degree of liberalization of the financial, foreign exchange and domestic goods markets in Africa. Liberalization of the foreign exchange market in Kenya was gradual- from a fixed exchange rate regime to crawling peg before a flexible or floating exchange rate regime was adopted in the 1990s. This paper analyses factors that have influenced exchange rate movements since the exchange rate market was liberalized in 1993. Despite the policy change, empirical studies explaining exchange rate movements in this period are still scant. Furthermore, the existing studies on Kenya have concentrated on applying the traditional theoretical models based on the interest rate and purchasing power parities. This paper adopts a general empirical specification of the exchange rate equation encompassing the interest rate and price differential, as well as current account balance and net external inflows to explain the exchange rate movements in the 1990s.
Subject/ Keywords
Exchange rate; Foreign exchange market; Interest rate; Empirical models; Theoretical models
Publisher
The Kenya Institute for Public Policy Research and AnalysisSeries
DP/10/2001;Collections
- Discussion Papers [319]
Related items
Showing items related by title, author, creator and subject.
-
Discussion Paper No.170 of 2014 on Real Exchange Rate Volatility and Exports in Kenya: 2005-2012
Otieno, Manaseh (The Kenya Institute for Public Policy Research and Analysis, 2014)The real exchange rate is an important factor in international trade because exports react to real exchange rate movements with respect to the characteristics of the importing and exporting countries. Real exchange rate ... -
Discussion Paper No. 86 of 2008 on Short Term Private Capital Flows and Real Exchange Rate in Kenya
Odongo, Maureen T. (The Kenya Institute for Public Policy Research and Analysis (KIPPRA), 2008)Kenya's capital and financial account balance displays a sharp shift in external financing from official assistance to private capital transfers in the 1990s. Whereas the capital account of the balance of payment reflects ... -
National Development Plan of 1974-1978 Part II
Government of Kenya (Government of Kenya, 1974)This Plan-Kenya's third since gaining political independence covers the projected growth of the economy over the five calendar years 1974-78 and, more specifically, the investment programme of the Government in the five ...