Economics, Econometrics and Finance
4 years ago

Excess money supply predicts exchange rate misalignment in Malawi

RePEc: Research Papers in Economics
A look at exchange rate and monetary policy in Malawi
Kisu Simwaka

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The paper looks at how monetary policy affects exchange rates in Malawi. It finds that excess money supply can predict exchange rate misalignment, with no feedback effects. The nominal exchange rate is influenced by factors like real income growth, inflation rate, money supply growth, and exchange rate misalignment. The speed of adjustment in the exchange rate is in line with a market-driven response to excess money supply.