The Role of Exchange Rates on Economic Growth. a Case Study of Bank of Uganda.

Abstract

The study sought to establish the effect of exchange rates on economic growth with the case study being bank of Uganda. Various businesses that import goods from other countries are affected by exchange rates therefore, there is need to understand and discover the effect of exchange rates on economic growth. The success or failure of these businesses contributes to the economic growth of the country. Developing countries like Uganda have not yet learnt to watch and manipulate the exchange rates unlike the developed countries that watch and analyze their exchange rates critically and the result is a better economy compared to the developing countries.

The study considered a population of 80 respondents from whom a sample size of 66 was taken. Research was carried out by handing out questionnaires to the selected elements and the data was analysed using graphs and tables to make conclusions to the data collected. The findings of the study discovered that the concept of foreign exchange rates is a very crucial element in the in a country’s economic growth. It is something which successful countries devote most of their efforts. The results of the study have a number of policy implications which are divided into; exchange rate policy, investment policy, trade policy and monetary policy.

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