Impact of Political Factor on a Currency Strength: ACBF role in Monetary Policy Management
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- Détails du fichier
- Size: 25MB
- Créateur / Auteur : Joan Addedis
- Type de ressource : Africa Capacity Report
- # Télécharger: 254
- Accéder: Open to Download
Informations de base
Créateur / Auteur
Sokpor, Claude Kodzo Dr.
Source / Éditeur
ACBF
Type de ressource
Détails géographiques et d'audience
Couverture géographique
Classification et domaines
Objet
Monetary Policy Analysis
Résumé
Money has been the engine for propelling any economy. Currency has been the most important and precious commodity the world has ever invented. Being Disbursement Officer in ACBF, I had firsthand experience in exchange rate instability in ACBF funded projects. Projects would report currency exchange rate lost because, various countries currencies are not only unstable but also do depreciate daily. From 1997 to 2009, Zimbabwe experienced currency high instability with all its related economic and social consequences. Over this period ACBF declared huge exchange lost in its annual audited reports. African countries and regional currencies rather depreciate than appreciate. Economic factors affecting currency exchange rate in almost these countries do not mater. Political negative environment has impacted a lot on such countries currencies. Zimbabwe dollar which was once very strong; systematically crashed and disappeared in 2009. Burundi franc kept on depreciating since the war started and currently has become one of the weakest currencies in Africa. Malawi kwacha has been very strong and stable but, since 2010 political dispute between the government and the western donor community saw kwacha losing 100% of its value; devaluation suggested by the IMF mission at that time. Understanding of political factor on currency value is therefore very important to political, economic, business and development elites and stakeholders. Recommendations that focused on politics, good governance as defined by IMF, World Bank and United Nations, formulation and implementation of monetary policy, creation of Regional currencies, and finally Africa single currency will be the way forward.
Mots-clés
Exchange rates, Monetary Policy Management, Currency Reform, Inflation
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