Effect of electronic payment systems, and financial inclusion on the forex market in Ghana
Keywords:
Forex Market, Electronic Payment System, Digital Finance, Remittance, Exchange RateAbstract
The study examines the impact of electronic payment systems and financial inclusion on the forex market in Ghana, using data from the world development indicators, spanning 2012 to 2023. The autoregressive distributed lag (ARDL) method was used since the variables were integrated of order one I(1) and I(0) respectively. The increasing adoption of digital payment platforms and financial services accessibility has transformed the financial ecosystem, influencing exchange rate dynamics. Findings reveal that electronic payment systems enhance transactional efficiency, reduce reliance on cash, and formalize remittance flows, stabilizing forex market demand. Similarly, financial inclusion expands access to credit and savings, strengthens domestic economic activity, and mitigates pressure on foreign currency demand. However, these benefits depend on robust infrastructure, financial literacy, and effective regulatory frameworks. The study underscores the need for policy measures to foster digital finance adoption, enhance financial literacy, and align financial inclusion efforts with broader economic strategies to ensure sustainable forex market stability.
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