Abstract
Concern over the frequency of aborted attempts at the
parallel market exchange rate and its macroeconomic interactions.
It is in the light of this, that the present study, employing a non-linear two stage least squares technique, and using quarterly
Kenyan data, examines the determinants of the parallel exchange rate and the impact of its fluctuations on key macroeconomic aggregates- namely the price level, the output level and the demand for real money balances