Accounting and Auditing

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Browsing Accounting and Auditing by Author "A., Wollela (Ph.D.)"

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    Foreign Currency Shortage in Ethiopia and its Implications for Imports
    (A.A.U, 2021-03) Tesfaye, Yordanos; A., Wollela (Ph.D.)
    This thesis aims to investigate foreign currency shortage and its implication to the import sector. Specifically, the thesis examines the impact of foreign currency reserve, inflation, depreciation in the value of US dollar, Gross Domestic Product, Remittance and foreign debt on import. The study is conducted using a mixed research approach. The Quantitative data were collected from 34 years of import and export data from the National Bank of Ethiopia, World Bank, and Ministry of Revenues on the other hand the qualitative data is collected from the interview of the importers and higher officials of sixteen private commercial bank. Generally, the regression results of both long-run models mostly suggest that the fluctuations of real exchange rates are predominantly responses to monetary policy shocks rather than fiscal policy shocks. Furthermore, the result from the interview showed that there is an acute shortage of foreign currency caused mainly by the slow growth of the export as compared to imports of the country followed by brisk expansion of black-market foreign exchange, low flow of remittances via the formal market, increase in government imports in line with the huge infrastructure projects being undertakings. Based on the result of the study, enhancing the export and remittance, parallel support for the manufacturing sector producing export and import substitute items, and minimize black market foreign exchange are among the recommendation by the researcher