The Effects of Currency Depreciation on Consumer Buying Behavior in Somalia

Abstract

This study analyzed the effects of currency depreciation on consumer buying ehavior in Somalia. The study used a qualitative research method to assess the effects of local currency depreciation on consumer buying ehavior. The study employed documentary review tool to collect data on the effects local currency depreciation on consumer buying ehavior in Somalia. The study reviewed several books, articles and journals in relation to the effects local currency depreciation on consumer buying ehavior in Somalia. The key findings of the study on the effects of currency depreciation on consumer buying ehavior in Somalia include: currency depreciation increases the price of imported of goods and services that makes it impossible from the consumers to buy them with local currency, currency depreciation increases the consumers’ buying power to purchase the domestic goods, currency depreciation leads to aggravated inflation that hinders the buying power of the consumers and manufacturers move imported cost like the cost of raw materials to the consumer who they bear the burden and they become so poor with little capacity to purchase goods and services. Therefore, the study recommended that the Federal Government to come with clear and effective monetary policy and regulations to allow the use financial control and the use of local currency in the economy to increase consumer purchasing power to promote rapid economic growth in the economy.