The Effect Of Monetary Policy On Economic Growth In Mogadishu Somalia, Case Study Central Bank Of Somalia
Volume 5 - Issue 2, February 2022 Edition
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Author(s)
Farhan Bashir Ali
Keywords
monetary policy; Economic growth
Abstract
The Main purpose of this article was examining the effect of monetary policy on economic growth in Mogadishu Somalia. to describe the effect of unemployment rate on economic growth in Mogadishu Somalia, to examine the effect of inflation on economic growth in Mogadishu, to investigate the relationship between currency exchange rate and economic growth in Mogadishu Somalia. the target population was 60 and sample size was 38, employees at central bank; The study was conducted through descriptive research design and used questionnaires as the main instrument for collecting data. Data was analyzed using SPSS by assessing the frequency of respondents per question.The findings of study that the effect of unemployment rate on economic growth at the have objective one, agree which represents (76.3%), the second groups are answered strongly agree which represents (13.2%), third groups are answered neutral which represents (2.6%) and fourth groups are disagree which represents are (7.9%). There is inverse relationship between economic growth and unemployment. While objective two examines the effect of inflation on economic growth have the following findings under this objective.The majority of the respondents are reported agree which represents (57.9%), the second groups are answered strongly agree which represents (26.3%), third groups are answered neutral which represents (2.6%) and fourth groups are disagree which represents are (2.6%) and fifth groups are answered strongly disagree Which represents (10.5%). The effect of inflation on economic growth is nonlinear which means negative effect. Third objective of the study was to investigate the relationship between the currency exchange rate and economic growth. The majority of the respondents are answered agree which represents (55.3%), the second groups are answered strongly agree which represents (26.8%), third groups are answered neutral which represents (5.3%) and fourth groups are disagree which represents are (5.3%) and fifth groups are answered strongly disagree Which represents (7.9%). The relationship between the exchange rate and economic growth is certainly a positive. The result further showed that there is a significant relationship between monetary policy and economic growth.The Article recommends Formulating and implementing monetary and exchange rate policies. The federal government of Somalia must tackle widespread unemployment in the country by creating job opportunities. Central bank of federal government of Somalia should use capital controls, foreign reserve accumulation and foreign exchange management to reduce the risk of financial crises. Central bank of federal Governments of Somalia should use a contractionary monetary policy to fight inflation. Central bank of the government of Somalia should be center of financial management.
References
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