The Impact of Remittance Flow on Real Effective Exchange Rate: Empirical Evidence from The Gambia

Foday Joof and Sheriff Touray

MPRA Paper from University Library of Munich, Germany

Abstract: The paper investigates the impact of remittance on real effective exchange rate in The Gambia. The Fully Modified OLS and Dynamic OLS are used on a monthly data from 2009M1 to 2019M12. FMOLS and DOLS estimations revealed that remittance has a positive significant impact on real effective exchange rate in The Gambia, implying that 1% increment in remittance leads to a real appreciation of the Gambian Dalasi (GMD) against the major currencies by 1.5%. Likewise, inflation is positively associated with REER, while the relationship amid foreign reserves and REER is inconclusive. Contrarily, money supply and monetary policy rate were found to have a depreciating impact on REER in both models.

Keywords: Remittance; Real effective exchange rate; FMOLS; DOLS; The Gambia (search for similar items in EconPapers)
JEL-codes: C1 E6 (search for similar items in EconPapers)
Date: 2021-02-11
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:106045

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