Macroeconomic Fundamentals and the Exchange Rate Volatility: Empirical Evidence From Somalia

Mohamed Ibrahim Nor, Tajul Ariffin Masron and Tariq Tawfeeq Yousif Alabdullah

SAGE Open, 2020, vol. 10, issue 1, 2158244019898841

Abstract: The purpose of this research is to investigate the effect of macroeconomic factors on the volatility of Somalia’s unregulated exchange rates. While utilizing the EGARCH (exponential generalized autoregressive conditional heteroskedastic) model, this study found that the unregulated exchange rate volatility of Somalia is influenced by its own shocks and the macroeconomic factors. This study implies that although Somali shilling circulated without regulatory authority for the period of the statelessness, this circulation has been accompanied by volatile exchange rates. This phenomenon makes this study an appealing work that should be pursued further. Hence, this study contributes notably to the process of reforming the exchange rate system and the monetary policy of the post-conflict economy of Somalia. In addition, the results of this study imply that even in times of war and lawlessness the laws of economics do not change completely.

Keywords: unregulated exchange rates; exchange rate volatility; macroeconomic factors; Somali shilling (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/2158244019898841 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:10:y:2020:i:1:p:2158244019898841

DOI: 10.1177/2158244019898841

Access Statistics for this article

More articles in SAGE Open
Bibliographic data for series maintained by SAGE Publications ().