Effects of monetary policy on the performance of agricultural firms listed on Nairobi Securities Exchange
Date
2023
Authors
Dushime, B. P.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The general objective of this study was to investigate the effects of monetary policy on the performance of agricultural firms listed in Nairobi Securities Exchange. The study was guided by specific research objectives including examining how the performance of agricultural firms listed at the NSE was affected by the Central Bank rate, change of reserve requirement and open market operations. The study was founded on the monetarist theory and the financial repression theory. An empirical literature review was done and research gaps were identified. This study adopted explanatory research design that was used to state the relationship that exists between monetary policy and performance of agricultural firms listed on NSE, hence investigating the causal effect among the variables in the study. The dependent variable was performance of agricultural firms listed on NSE, while the Central Bank rate, the change in reserve requirement and open market operations were the independent variables. Exchange rate and climate change were used as control variables. The study used all the agricultural firms listed on the NSE. The study used secondary data from annual reports of the agricultural firms and published reports by the Central Bank. The data collected were analyzed using both descriptive and inferential statistics by the assistance of the Statistical Package for Social Sciences (SPSS). The model indicated that increase in Central Bank rate negatively affected the performance of the agricultural firms, an increase in cash reserve requirement had a negative effect and an increase in the Treasury bills rate had a positive effect. Additionally, an increase in exchange rate had a positive impact on performance of agricultural firms while increased precipitation levels negatively influenced the performance of listed agricultural firms. The study recommended Central Bank to maintain an optimal CBK rate, ensure enough cash flow in the economy and stability in the currency. It also recommended more use of technology in crop production to reduce dependence on rain in agricultural production. The study recommended further research including fiscal policies on both listed and unlisted agricultural firms.
Description
Full- text thesis
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Citation
Dushime, B. P. (2023). Effects of monetary Policy on performance of agricultural Firms listed on Nairobi Securities Exchange [Strathmore University]. http://hdl.handle.net/11071/13387