The Impact of Monetary Policies on Foreign Direct

Author

Ndlovu, Tinashe

Title

The Impact of Monetary Policies on Foreign Direct

Abstract

The study used the Stepwise regression model to assess the impact of monetary policies on foreign
direct investment in Zimbabwe with other selected macroeconomic variables such as exchange
rate, inflation transparency and gross domestic product for the period of 1960 to 2021. Data were
taken from the World Bank, Data Bank and The Global Economy. The empirical results derived
indicated that all variables have an impact on the influx of foreign direct investment. The study
further established that inflation has a negative impact on investment while gross domestic product
has a positive impact on foreign direct investment. As a result, it is recommended that policies that
encourage reduction of the inflation be formulated in order to attract the foreign direct investment.
It is also recommended that the ZAR or USD be adopted as the main currency in order to reduce
the economy’s exposure to exchange rate risk. No research work that is exhaustive. As a result,
we recommend that future research expand the model to incorporate more macroeconomic factors
and, if data are available, broaden its scope to encompass a larger sample size.

Date

2023

Publisher

BUSE

Keywords

Monetary Policies

Impact

Supervisor

Mr Basira