Effect of Exchange Rate Movements on Ghanaian Banks

Albert Amponsah Addae; Michael Nyarko-Baasi; Michael Lawer Tetteh

doi:doi:10.11648/j.jfa.20140203.15

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Effect of Exchange Rate Movements on Ghanaian Banks

Albert Amponsah Addae, Michael Nyarko-Baasi, Michael Lawer Tetteh

Published in Journal of Finance and Accounting (Volume 2, Issue 3)

Received: 29 April 2014 Accepted: 12 May 2014 Published: 30 May 2014

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Abstract

The main purpose of this paper is to look at the exchange rate sensitivity of some listed banks on the Ghana Stock Exchange (GSE) between 2005 and 2010. In order to achieve the purpose, we adopted both quantitative and qualitative approaches. Econometric models were employed to deal with both the exchange rate sensitivities and to ascertain the exchange rate exposure of the Banks. The study discovered that all the banks studied engage in forex trading and made gains/profits from such activities. It was further found that apart from Ghana Commercial Bank and Standard Chartered Bank who were exposed to foreign exchange risk - pound sterling, the rest of the banks had no exposure to any of the currency risk. All the banks on the other hand have risk management structures in place to mitigate any risks that arise as a result of their operations. The overall interest in risk management by the banks is very high as they have put in some financial derivative measures to mitigate any exchange rate risk that they are exposed to.

Published in	Journal of Finance and Accounting (Volume 2, Issue 3)
DOI	10.11648/j.jfa.20140203.15
Page(s)	62-71
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2014. Published by Science Publishing Group

Keywords

Exchange Rate, Foreign Exchange Risk, Ghana Stock Exchange

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APA Style

Albert Amponsah Addae, Michael Nyarko-Baasi, Michael Lawer Tetteh. (2014). Effect of Exchange Rate Movements on Ghanaian Banks. Journal of Finance and Accounting, 2(3), 62-71. https://doi.org/10.11648/j.jfa.20140203.15

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ACS Style

Albert Amponsah Addae; Michael Nyarko-Baasi; Michael Lawer Tetteh. Effect of Exchange Rate Movements on Ghanaian Banks. J. Finance Account. 2014, 2(3), 62-71. doi: 10.11648/j.jfa.20140203.15

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AMA Style

Albert Amponsah Addae, Michael Nyarko-Baasi, Michael Lawer Tetteh. Effect of Exchange Rate Movements on Ghanaian Banks. J Finance Account. 2014;2(3):62-71. doi: 10.11648/j.jfa.20140203.15

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@article{10.11648/j.jfa.20140203.15,
  author = {Albert Amponsah Addae and Michael Nyarko-Baasi and Michael Lawer Tetteh},
  title = {Effect of Exchange Rate Movements on Ghanaian Banks},
  journal = {Journal of Finance and Accounting},
  volume = {2},
  number = {3},
  pages = {62-71},
  doi = {10.11648/j.jfa.20140203.15},
  url = {https://doi.org/10.11648/j.jfa.20140203.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20140203.15},
  abstract = {The main purpose of this paper is to look at the exchange rate sensitivity of some listed banks on the Ghana Stock Exchange (GSE) between 2005 and 2010. In order to achieve the purpose, we adopted both quantitative and qualitative approaches.  Econometric models were employed to deal with both the exchange rate sensitivities and to ascertain the exchange rate exposure of the Banks. The study discovered that all the banks studied engage in forex trading and made gains/profits from such activities. It was further found that apart from Ghana Commercial Bank and Standard Chartered Bank who were exposed to foreign exchange risk - pound sterling, the rest of the banks had no exposure to any of the currency risk. All the banks on the other hand have risk management structures in place to mitigate any risks that arise as a result of their operations. The overall interest in risk management by the banks is very high as they have put in some financial derivative measures to mitigate any exchange rate risk that they are exposed to.},
 year = {2014}
}

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TY  - JOUR
T1  - Effect of Exchange Rate Movements on Ghanaian Banks
AU  - Albert Amponsah Addae
AU  - Michael Nyarko-Baasi
AU  - Michael Lawer Tetteh
Y1  - 2014/05/30
PY  - 2014
N1  - https://doi.org/10.11648/j.jfa.20140203.15
DO  - 10.11648/j.jfa.20140203.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 62
EP  - 71
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20140203.15
AB  - The main purpose of this paper is to look at the exchange rate sensitivity of some listed banks on the Ghana Stock Exchange (GSE) between 2005 and 2010. In order to achieve the purpose, we adopted both quantitative and qualitative approaches.  Econometric models were employed to deal with both the exchange rate sensitivities and to ascertain the exchange rate exposure of the Banks. The study discovered that all the banks studied engage in forex trading and made gains/profits from such activities. It was further found that apart from Ghana Commercial Bank and Standard Chartered Bank who were exposed to foreign exchange risk - pound sterling, the rest of the banks had no exposure to any of the currency risk. All the banks on the other hand have risk management structures in place to mitigate any risks that arise as a result of their operations. The overall interest in risk management by the banks is very high as they have put in some financial derivative measures to mitigate any exchange rate risk that they are exposed to.
VL  - 2
IS  - 3
ER  -

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Author Information

Albert Amponsah Addae

Methodist University college Ghana, Department of Banking and Finance, Box DC 940 Dansoman- Accra
Michael Nyarko-Baasi

Methodist University college Ghana, Department of Banking and Finance, Box DC 940 Dansoman- Accra
Michael Lawer Tetteh

School of Business, Zenith University College, Ghana

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APA Style

Albert Amponsah Addae, Michael Nyarko-Baasi, Michael Lawer Tetteh. (2014). Effect of Exchange Rate Movements on Ghanaian Banks. Journal of Finance and Accounting, 2(3), 62-71. https://doi.org/10.11648/j.jfa.20140203.15

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ACS Style

Albert Amponsah Addae; Michael Nyarko-Baasi; Michael Lawer Tetteh. Effect of Exchange Rate Movements on Ghanaian Banks. J. Finance Account. 2014, 2(3), 62-71. doi: 10.11648/j.jfa.20140203.15

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AMA Style

Albert Amponsah Addae, Michael Nyarko-Baasi, Michael Lawer Tetteh. Effect of Exchange Rate Movements on Ghanaian Banks. J Finance Account. 2014;2(3):62-71. doi: 10.11648/j.jfa.20140203.15

Copy | Download

@article{10.11648/j.jfa.20140203.15,
  author = {Albert Amponsah Addae and Michael Nyarko-Baasi and Michael Lawer Tetteh},
  title = {Effect of Exchange Rate Movements on Ghanaian Banks},
  journal = {Journal of Finance and Accounting},
  volume = {2},
  number = {3},
  pages = {62-71},
  doi = {10.11648/j.jfa.20140203.15},
  url = {https://doi.org/10.11648/j.jfa.20140203.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20140203.15},
  abstract = {The main purpose of this paper is to look at the exchange rate sensitivity of some listed banks on the Ghana Stock Exchange (GSE) between 2005 and 2010. In order to achieve the purpose, we adopted both quantitative and qualitative approaches.  Econometric models were employed to deal with both the exchange rate sensitivities and to ascertain the exchange rate exposure of the Banks. The study discovered that all the banks studied engage in forex trading and made gains/profits from such activities. It was further found that apart from Ghana Commercial Bank and Standard Chartered Bank who were exposed to foreign exchange risk - pound sterling, the rest of the banks had no exposure to any of the currency risk. All the banks on the other hand have risk management structures in place to mitigate any risks that arise as a result of their operations. The overall interest in risk management by the banks is very high as they have put in some financial derivative measures to mitigate any exchange rate risk that they are exposed to.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - Effect of Exchange Rate Movements on Ghanaian Banks
AU  - Albert Amponsah Addae
AU  - Michael Nyarko-Baasi
AU  - Michael Lawer Tetteh
Y1  - 2014/05/30
PY  - 2014
N1  - https://doi.org/10.11648/j.jfa.20140203.15
DO  - 10.11648/j.jfa.20140203.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 62
EP  - 71
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20140203.15
AB  - The main purpose of this paper is to look at the exchange rate sensitivity of some listed banks on the Ghana Stock Exchange (GSE) between 2005 and 2010. In order to achieve the purpose, we adopted both quantitative and qualitative approaches.  Econometric models were employed to deal with both the exchange rate sensitivities and to ascertain the exchange rate exposure of the Banks. The study discovered that all the banks studied engage in forex trading and made gains/profits from such activities. It was further found that apart from Ghana Commercial Bank and Standard Chartered Bank who were exposed to foreign exchange risk - pound sterling, the rest of the banks had no exposure to any of the currency risk. All the banks on the other hand have risk management structures in place to mitigate any risks that arise as a result of their operations. The overall interest in risk management by the banks is very high as they have put in some financial derivative measures to mitigate any exchange rate risk that they are exposed to.
VL  - 2
IS  - 3
ER  -

Copy | Download