Exchange rate and bank loans in Uganda: a case of centenary rural development bank Kawempe Bombo road

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Kampala International University, College of Economics and Management
This research was set out to investigate the relationship between Exchange rate and Bank loans in Uganda for a period of ten years from 2002 to 2012. The study was set to employ the cross sectional research design since it basically examined secondary data over the above period; it was also a descriptive-correlation since it was interested in examining the relationship between the independent variables and the dependent variable. The Population of this study was the published and non-published reports on the variables under study. The objectives were; to examine: the changes in the lending rates, establish the changes in exchange rates (American dollar and British pound) and to determine relationship between exchange rates and lending rates from the period of2002-2012 in centenary bank. The study found out that there has been a continuous increment in the rate at which CERUDEB has been giving out loans to its clients within the studied period since the rate grew from 7.1 in 2002 to 9.2 by 2007. The second objective of the study set out to establish the exchange rate. It was established that the lowest exchange rate of the dollar was experienced in 2002, followed by a gradual increase up to 2006. It also shows two peaks, one experienced in 2004 and the second one experienced in 2010 from which the exchange rate declined till 2012. The exchange rate for the British pound displays a more or less a linear relationship of exchange over time. The lowest having been experienced in 2002, then a gradual increase up to 2004 followed by a marked decline in 2005. From this time the exchange rate increased gradually till the time when the exchange rate reached its highest in 2009. Basing on the findings it was also established that exchange rate has got a significant effect on lending rate.
A Research Proposal Submitted to the College Of Economics and Management In Partial Fulfillment of the Requirement for the Award of Bachelor’s Degree In Business Administration of Kampala International University
Exchange rate, Bank loans, Uganda, Centenary rural development bank, Kawempe Bombo road