Main Article Content
Abstract
The supply of money and the rate at which one currency is exchanged for another can be an important determinant of output growth volatility. The paper used money supply, exchange rate and output growth variables in its analysis. The study used time series data from 1987-2023. After establishing the existence of Autoreggressive Conditional Heteroscedasticity (ARCH) and Generalised Autoreggressive Conditional Heteroscedasticity (GARCH), Generalised Linear Model (GLM) was used to analyse the data. The result shows that the exchange rate has a higher impact on output growth volatility than the money supply. It was recommended that currency sterilization which advocates for slow growth of money supply by keeping the monetary base from expanding when the central bank’s intervention in the foreign exchange market leads to greater holding of international reserves can be a viable policy option.