Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/304258 
Year of Publication: 
2023
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 11 [Issue:] 2 [Article No.:] 2276364 [Year:] 2023 [Pages:] 1-30
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
Redenomination of currency has become a common phenomenon in recent past among emerging and transitional economies. In 2007, Ghana became one of the economies to redenominate in recent past. This currency policy adaptation has the potential of triggering certain individual behavioral biases on the forex market. This study provides evidence that currency biases that accompanied Ghana's currency reform adaptation in 2007 contribute to its forex market price (exchange rate) fluctuations. Using data from 1980 to 2018 with some estimated biases and some selected macroeconomic fundamentals as covariates in an ANCOVA (Analysis of Covariance) model, the study revealed that estimated biases which were induced as a result of currency reform adaptation impact positively and significantly on Ghana's forex market prices. It is therefore recommended that policy makers, political leaders and stakeholders begin to look at human factors that may exist in the forex market and incorporate this information into future plans in addressing issues relating to forex market fluctuations.
Subjects: 
behavioral biases
currency reform
forex market
macroeconomic fundamentals
money illusion
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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