Main Article Content
Abstract
This study aims at assessing the effect of money supply in the private sector with francophone CFA and currency devaluation. Monetary policy can be defined as the process by which the government, central bank, or monetary authority of a country or group of countries control the supply of money, availability of money, and cost of money or rate of interest to attain a set of objectives oriented towards the growth and stability of the economy. Fourteen countries of the Franc zone over the period of 2012- 2024 using a dynamic panel model was considered to examine the impact on Francophone CFA and currency devaluation. The analysis reveals that money supply has significant positive effect on economic growth, while total reserves and inflation have a negative effect. However the negative effect of domestic credit provided by banking sector can be reversed through allocation of funds to those projects for which the social returns are the highest through allocation of funds to local industries. The results show significant positive impact on money supply in private sector with Francophone CFA for the periods. The study recommends the need for government to improve on the macroeconomic environment through the harmonization of monetary and fiscal policies in order to ensure stability of the economic aggregates. Also, attention should be focused on deepening the financial sector in Francophone through the creation of modern, efficient and strong financial institution that will mobilize the idle financial resources domiciled outside the financial institution. Furthermore, government should have sound, credible and feasible policies to strengthen financial system. The policies should be given priority to develop financial sector.