Abstract:
The Ghanaian economy has for some time witnessed a seemingly unstable exchange rate. The strength of the cedi against the dollar has been fluctuating for the past decades. Analysts established that the instability in the exchange rate stems from the massive importation of goods and services which could be produced in the country. The worsening and unstable strength of the cedi against major currencies like the US dollar has contributed immensely to the rise in the cost of goods and services in Ghana. Firms that engage in international trade are hard hit with this occurrence. Manufacturing firms whose inputs are mostly imported from other countries are mostly at the receiving end. This study therefore found it expedient to employ panel data analysis to examine how fluctuations in the exchange rate has had impact on the financial performance of some selected firms and the manufacturing industry in general. The study observed that apart from Real Exchange Rate which is the variable of interest in this study, GDP and Interest Rate are the variables which have significant impact on both ROA and ROE of the manufacturing firm
