The Effect of Foreign Exchange Rate Fluctuation on the Financial Risk Profile of the Government of Kenya
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Date
2015Author
Maneno, Catherine A
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The purpose of this study is to determine the effect of exchange rate fluctuation on the
financial risk profile of the government of Kenya. The study was guided by different
theoretical literature which included fiscal theory of sovereign risk and default, the theory
of sovereign debt and default, the theory of sovereign default risk assessment from the
bottom-up and micro-macro relationships. The methodology was both descriptive and
inferential. Secondary data was used and was obtained from the debt department of the
National Treasury, Central Bank of Kenya and Kenya National Bureau of Statistics. The
data was analyzed using Statistical Package for Social Science (SPSS V. 21). Descriptive
statistics was presented in mean and standard deviation while inferential statistics was
presented using multicolinerality. The findings of the study on different currency on the
effect of the exchange rate fluctuation and risk profile indicated that there are some
currency that are volatile than others. They include the EUR and USD currencies. There
exists a relationship between the variables that is exchange rate fluctuation, interest rate
and principal amount issued (0.01) and there exist no relationship between the amount
repaid in the Kenya shillings and foreign exchange rate at 0.07. The study recommends that
the exchange rate fluctuation faced by the government of Kenya forms a significant
component of the risk profile. It is therefore imperative for the state of Kenya with and
without international operations to effectively manage its foreign exchange fluctuation.
Publisher
University of Nairobi
Description
Thesis