An Empirical Examination of the Impact of Exchange Rate Fluctuation on Economic Growth in Sierra Leone

Abstract

Exchange rate fluctuation is considered in the literature as an essential driver of economic growth. This paper aims to investigate the impact of exchange rate fluctuation on economic growth of the Sierra Leone economy. As a whole, the period under consideration is a thirty-nine year period spanning from 1980 to 2018 inclusive. Previous researches show that there can be both positive and negative impact of exchange rate fluctuation on economic growth of a nation’s economy, and in this paper, we discovered that exchange rate fluctuation (depreciation of the Leones) has a positively significant relationship with economic growth in Sierra Leone. We used both ADF-test and PP-test to check for stationarity of the variables. The ordinary least square method was used to analyse data and results are based on regression analysis conducted from available data.