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The five-day regional training workshop brought together participants from the sub-region.
In his address at the opening of the course, the Deputy Governor of the Central Bank of The Gambia, Basiru Njie, said the exchange rate of an economy affects aggregate demand through its effects on exports and imports.
He said exchange rates could be manipulated to deviate from their market rate, and some economists regard exchange rate manipulation as a type of monetary policy.
Mr Njie noted that exchange rates could be manipulated by buying or selling of currencies on the foreign market, and by increasing or decreasing interest rates, which affect the demand and supply of the local currency.
He said for countries where a large share of its output is traded internationally, changes in exchange rates could have a powerful effect on aggregate demand.
“There is diversity in the exchange rate regimes ranging from hard currency pegs to relatively free floats,” he said.
However, as countries adapt to expanding opportunities due to greater involvement in the increasingly integrated global economy, as well as changes in their own economic situations, the tendency is to shift towards greater flexibility.
Thanks to globalization, many developing countries now trade with wider range of partner countries and countries with single currency pegs are exposed to fluctuations against major currencies, he stated.
According to him, countries that maintain relatively flexible exchange rates regimes use both monetary policy and official intervention to influence the exchange rate.
He said intervention is generally more effective in countries where access to international capital market is limited, so that authorities have greater capacity in foreign exchange market by buying and selling foreign exchange.
Also speaking at the opening ceremony was Chris Kenze, director of Macroeconomic department at WAIFEM, who said the mission of WAIFEM is to develop on a sustainable basis expertise in the fields of Macroeconomic, Debt and Financial sector management among the staff of central banks, ministries of finance and other public sector bodies with core-economic management responsibilities.
Mr Kenze noted that the reasons justifying the concentration of attention on the exchange rate could not be far raised, as exchange rate affects cross-border economic transactions.
Trade investment and migration and many more are all profoundly influenced by international monetary policies, he said, adding that economies become globalised as more firms, investors and workers find their fortunes linked to the exchange rate and its impact on trade and financial flows.
He explained that the international economic integration involves increased exposure to international financial and commercial flows, as well as heightens the concerns of those involved to international trade and finance.
It should be noted that all currencies in the member countries are non-convertible, hence the importance of policymakers to appreciate the skills necessary to manage exchange rates, he stated.