Relationship Between Exchange Rates And Kenya Stock Index Within The Context Of A Fluctuating Growth Rate And Political Environment

Abstract

This study investigates the impact of fluctuating growth rates and politics on the relationship between exchange rates and the Kenya Stock Index. By utilizing historical data from 2008 to 2017, the research employs quantitative methods and statistical techniques such as the Bai Perron procedure, correlation, and granger causality. The results demonstrate significant correlation and causality during the global recession, while local events have a lesser impact. The political environment, including elections and regional politics, also influences this relationship. The findings emphasize the need for comprehensive under- standing and awareness of these dynamics to guide informed decision-making in investments, risk management, and monetary policy.