REMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATION
Purpose: This study investigated the impact of remittances on the nominal exchange rate in Kenya, using annual data from 1980 to 2020. The study was motivated by the need to find out how remittances affect the exchange rate in Kenya based on an increase in remittance inflows in low- and middle-incom...
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| Format: | Article |
| Language: | English |
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University of Banja Luka, Faculty of Economics
2023-12-01
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| Series: | Acta Economica |
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| Online Access: | https://www.ae.ef.unibl.org/index.php/ae/article/view/456 |
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| _version_ | 1841547984185065472 |
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| author | Mercy T. Musakwa Nicholas. M Odhiambo |
| author_facet | Mercy T. Musakwa Nicholas. M Odhiambo |
| author_sort | Mercy T. Musakwa |
| collection | DOAJ |
| description | Purpose: This study investigated the impact of remittances on the nominal exchange rate in Kenya, using annual data from 1980 to 2020. The study was motivated by the need to find out how remittances affect the exchange rate in Kenya based on an increase in remittance inflows in low- and middle-income countries, including Kenya. This is important as Kenya continues to build a stable macroeconomic environment that supports economic growth and other milestones specified in the Sustainable Development Goals.
Methodology: The study used the autoregressive distributed lag approach to examine this linkage.
Results: The study, therefore, concludes that remittance inflows in Kenya are not associated with the appreciation of the currency, as predicted by some previous studies.
Conclusion: The study, therefore, concludes that remittance inflows in Kenya are not associated with the Dutch-disease phenomenon.
Recommendation: It is recommended that Kenya may continue to implement policies that support remittance inflows to realize an improvement in the balance of payments in the country.
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| format | Article |
| id | doaj-art-828d5ea53c4d4eb2bb447ea32646cee9 |
| institution | Kabale University |
| issn | 1512-858X 2232-738X |
| language | English |
| publishDate | 2023-12-01 |
| publisher | University of Banja Luka, Faculty of Economics |
| record_format | Article |
| series | Acta Economica |
| spelling | doaj-art-828d5ea53c4d4eb2bb447ea32646cee92025-01-10T14:15:14ZengUniversity of Banja Luka, Faculty of EconomicsActa Economica1512-858X2232-738X2023-12-01213910.7251/ACE2339129MREMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATIONMercy T. Musakwa0https://orcid.org/0000-0001-6280-140XNicholas. M Odhiambo1https://orcid.org/0000-0003-4988-0259Department of Economics, University of South Africa, Pretoria, South AfricaDepartment of Economics, University of South Africa Pretoria, South AfricaPurpose: This study investigated the impact of remittances on the nominal exchange rate in Kenya, using annual data from 1980 to 2020. The study was motivated by the need to find out how remittances affect the exchange rate in Kenya based on an increase in remittance inflows in low- and middle-income countries, including Kenya. This is important as Kenya continues to build a stable macroeconomic environment that supports economic growth and other milestones specified in the Sustainable Development Goals. Methodology: The study used the autoregressive distributed lag approach to examine this linkage. Results: The study, therefore, concludes that remittance inflows in Kenya are not associated with the appreciation of the currency, as predicted by some previous studies. Conclusion: The study, therefore, concludes that remittance inflows in Kenya are not associated with the Dutch-disease phenomenon. Recommendation: It is recommended that Kenya may continue to implement policies that support remittance inflows to realize an improvement in the balance of payments in the country. https://www.ae.ef.unibl.org/index.php/ae/article/view/456Kenyaautoregressive distributed lagdepreciationappreciationremittancesexchange rate |
| spellingShingle | Mercy T. Musakwa Nicholas. M Odhiambo REMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATION Acta Economica Kenya autoregressive distributed lag depreciation appreciation remittances exchange rate |
| title | REMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATION |
| title_full | REMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATION |
| title_fullStr | REMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATION |
| title_full_unstemmed | REMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATION |
| title_short | REMITTANCE INFLOWS AND EXCHANGE RATE IN KENYA: AN EMPRIRICAL INVESTIGATION |
| title_sort | remittance inflows and exchange rate in kenya an emprirical investigation |
| topic | Kenya autoregressive distributed lag depreciation appreciation remittances exchange rate |
| url | https://www.ae.ef.unibl.org/index.php/ae/article/view/456 |
| work_keys_str_mv | AT mercytmusakwa remittanceinflowsandexchangerateinkenyaanempriricalinvestigation AT nicholasmodhiambo remittanceinflowsandexchangerateinkenyaanempriricalinvestigation |