Asymmetric dependence between commodity prices and selected macroeconomic variables in Ghana
The nexus between commodity prices (CDP) and exchange rates (EXE) is critical, particularly for a commodity-exporting nation like Ghana. This study investigates the asymmetric dependence between commodity prices (Cocoa, Crude Oil, Gold, Petrol, and Diesel) inflation and exchange rates in Ghana. The...
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| Language: | English |
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Elsevier
2025-06-01
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| Series: | Scientific African |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2468227625002091 |
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| author | Samuel Duku Yeboah Michael Provide Fumey Stephen Antwi Winful Isaac Christopher Otoo Peterson Owusu Junior |
| author_facet | Samuel Duku Yeboah Michael Provide Fumey Stephen Antwi Winful Isaac Christopher Otoo Peterson Owusu Junior |
| author_sort | Samuel Duku Yeboah |
| collection | DOAJ |
| description | The nexus between commodity prices (CDP) and exchange rates (EXE) is critical, particularly for a commodity-exporting nation like Ghana. This study investigates the asymmetric dependence between commodity prices (Cocoa, Crude Oil, Gold, Petrol, and Diesel) inflation and exchange rates in Ghana. The study employed monthly frequency data from 2003 to 2023 on commodity prices, inflation, and exchange rates. The research unveils fresh insights into this complex nexus by employing a quantile-on-quantile estimation. The findings challenge the conventional understanding of a uniform positive correlation, revealing more complex dynamics. Diesel and petrol prices positively impact the Ghanaian cedi's exchange rate, which implies a depreciation of the Ghanaian cedi currency. In contrast, cocoa and crude oil prices demonstrate a predominantly negative influence, indicating an appreciation of the Cedi currency. Furthermore, the study uncovers feedback effects and bidirectional relationships between specific commodity prices and exchange rates, highlighting potential self-reinforcing cycles. Outstandingly, incorporating inflation as a factor reveals a positive link between inflation and the exchange rate and a feedback effect, signifying a depreciation of the Cedi currency. These conclusions have policy implications for Ghana's policymakers, financiers, and stakeholders, offering valuable insights to inform policy decisions, risk mitigation strategies, and investment decisions. |
| format | Article |
| id | doaj-art-b4e4a1ca48b7435e81076e876d17a4f7 |
| institution | DOAJ |
| issn | 2468-2276 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Scientific African |
| spelling | doaj-art-b4e4a1ca48b7435e81076e876d17a4f72025-08-20T03:09:37ZengElsevierScientific African2468-22762025-06-0128e0273910.1016/j.sciaf.2025.e02739Asymmetric dependence between commodity prices and selected macroeconomic variables in GhanaSamuel Duku Yeboah0Michael Provide Fumey1Stephen Antwi Winful2Isaac Christopher Otoo3Peterson Owusu Junior4Corresponding author.; University of Cape Coast, (Department of Finance), P, Box UC 348, Cape Coast, GhanaUniversity of Cape Coast, (Department of Finance), P, Box UC 348, Cape Coast, GhanaUniversity of Cape Coast, (Department of Finance), P, Box UC 348, Cape Coast, GhanaUniversity of Cape Coast, (Department of Finance), P, Box UC 348, Cape Coast, GhanaUniversity of Cape Coast, (Department of Finance), P, Box UC 348, Cape Coast, GhanaThe nexus between commodity prices (CDP) and exchange rates (EXE) is critical, particularly for a commodity-exporting nation like Ghana. This study investigates the asymmetric dependence between commodity prices (Cocoa, Crude Oil, Gold, Petrol, and Diesel) inflation and exchange rates in Ghana. The study employed monthly frequency data from 2003 to 2023 on commodity prices, inflation, and exchange rates. The research unveils fresh insights into this complex nexus by employing a quantile-on-quantile estimation. The findings challenge the conventional understanding of a uniform positive correlation, revealing more complex dynamics. Diesel and petrol prices positively impact the Ghanaian cedi's exchange rate, which implies a depreciation of the Ghanaian cedi currency. In contrast, cocoa and crude oil prices demonstrate a predominantly negative influence, indicating an appreciation of the Cedi currency. Furthermore, the study uncovers feedback effects and bidirectional relationships between specific commodity prices and exchange rates, highlighting potential self-reinforcing cycles. Outstandingly, incorporating inflation as a factor reveals a positive link between inflation and the exchange rate and a feedback effect, signifying a depreciation of the Cedi currency. These conclusions have policy implications for Ghana's policymakers, financiers, and stakeholders, offering valuable insights to inform policy decisions, risk mitigation strategies, and investment decisions.http://www.sciencedirect.com/science/article/pii/S2468227625002091Asymmetric effectsCommodity pricesExchange ratesGhanaInflation |
| spellingShingle | Samuel Duku Yeboah Michael Provide Fumey Stephen Antwi Winful Isaac Christopher Otoo Peterson Owusu Junior Asymmetric dependence between commodity prices and selected macroeconomic variables in Ghana Scientific African Asymmetric effects Commodity prices Exchange rates Ghana Inflation |
| title | Asymmetric dependence between commodity prices and selected macroeconomic variables in Ghana |
| title_full | Asymmetric dependence between commodity prices and selected macroeconomic variables in Ghana |
| title_fullStr | Asymmetric dependence between commodity prices and selected macroeconomic variables in Ghana |
| title_full_unstemmed | Asymmetric dependence between commodity prices and selected macroeconomic variables in Ghana |
| title_short | Asymmetric dependence between commodity prices and selected macroeconomic variables in Ghana |
| title_sort | asymmetric dependence between commodity prices and selected macroeconomic variables in ghana |
| topic | Asymmetric effects Commodity prices Exchange rates Ghana Inflation |
| url | http://www.sciencedirect.com/science/article/pii/S2468227625002091 |
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