News / National
'RBZ's monetary policy not the root cause of ZiG devaluation'
02 Oct 2024 at 11:36hrs | Views
Recent findings by an anonymous economist suggest that the Reserve Bank of Zimbabwe's (RBZ) monetary policy may not be the root cause of the depreciation of the Zimbabwean dollar (Zig). The analysis employed a series of rigorous econometric tests, challenging the conventional narrative that a significant increase in the money supply has led to currency devaluation.
The economist utilized advanced statistical techniques to examine the performance of the Zig. By applying tests for normality, heteroskedasticity, and serial independence of regression residuals, a comprehensive picture of the currency's behavior emerged. Key tests employed include the Breusch-Pagan test, which assesses heteroskedasticity by regressing squared residuals on explanatory variables. This was followed by the Goldfeld-Quandt test, designed to compare variances of residuals across two subsets of data.
The Jarque-Bera test was also implemented to check for normality, all of which yielded results rejecting the null hypothesis. This indicated a lack of correlation between the money supply and the depreciation of the Zig, suggesting that other factors may be at play.
Furthermore, the economist applied the Box-Jenkins econometric model for forecasting Zig performance over the next three to six months. The analysis concluded that external variables, possibly including political instability, global economic conditions, or supply chain issues, might be influencing the currency's volatility more than the monetary policy itself.
As Zimbabwe grapples with economic challenges, these findings prompt a reevaluation of the factors affecting the Zig. Stakeholders, including policymakers and economists, may need to explore alternative approaches to stabilize the currency and improve economic conditions.
For further insights into Zimbabwe's economic situation and the implications of this analysis, you can refer to additional resources from reputable financial news outlets
The economist utilized advanced statistical techniques to examine the performance of the Zig. By applying tests for normality, heteroskedasticity, and serial independence of regression residuals, a comprehensive picture of the currency's behavior emerged. Key tests employed include the Breusch-Pagan test, which assesses heteroskedasticity by regressing squared residuals on explanatory variables. This was followed by the Goldfeld-Quandt test, designed to compare variances of residuals across two subsets of data.
The Jarque-Bera test was also implemented to check for normality, all of which yielded results rejecting the null hypothesis. This indicated a lack of correlation between the money supply and the depreciation of the Zig, suggesting that other factors may be at play.
Furthermore, the economist applied the Box-Jenkins econometric model for forecasting Zig performance over the next three to six months. The analysis concluded that external variables, possibly including political instability, global economic conditions, or supply chain issues, might be influencing the currency's volatility more than the monetary policy itself.
As Zimbabwe grapples with economic challenges, these findings prompt a reevaluation of the factors affecting the Zig. Stakeholders, including policymakers and economists, may need to explore alternative approaches to stabilize the currency and improve economic conditions.
For further insights into Zimbabwe's economic situation and the implications of this analysis, you can refer to additional resources from reputable financial news outlets
Source - Byo24News
