The impact of exchange rate volatility on private companies Performance: The case of Profeeds Zimbabwe from 2013 to 2022.
- Author
- Tanaka Madzura
- Title
-
The impact of exchange rate volatility on private companies
Performance: The case of Profeeds Zimbabwe from 2013 to 2022.
- Abstract
-
The major aim of the study was to investigate effects of exchange rate volatility (appreciation, stability and depreciation) on private companies in Zimbabwe performance for the period from January 2013 to December 2022 as measured and averaged quarterly. There were two specific objectives: first, to examine the impact of foreign exchange rate volatility on private company performance in Zimbabwe, secondly to investigate whether company characteristics such as Company size have any overriding effect in the major objective. First, the findings of the research show that exchange rate volatility (appreciation, stability and depression) had an influence on private companies’ performance in Zimbabwe during the study period. The co-relation findings portrayed a weak negative connection between the foreign exchange volatility and the profits of company’s over study period. The Zimbabwe dollar stochastic pattern during the entire study period with short periods of appreciation and stability. The exchange rates volatility was also found to be related to changes in inflation rates. The correlation between the inflation and exchange rate volatility was a weak one hence as inflation rates increased the USD rate also increase hence the Zimbabwe dollar depreciated in value. This facilitated an increase in the return on assets. There were several economic implications of these results for both business and public policy. First, a need for the management of companies operating in Zimbabwe to hedge against foreign exchange exposure, as the study revealed that an increase in foreign exchange volatility negatively affects their financial performance and thus reduction in the company value, there is need for better strategies to ensure financial performance is not affected by foreign exchange rate volatility
- Date
- 2023
- Publisher
- BUSE
- Keywords
-
Exchange rate
- Performance:
- Impact
- Supervisor
- N/A
- Item sets
- Department of Banking and Finance
- Media
-
Tanaka Madzura.pdf