| dc.description.abstract | The main aim of this study was to analyze the macroeconomic factors associated with the rise and descent of cement prices in Uganda, and the exchange rate was a key factor under study. Secondary data was used for the study, covering a period of 10 years (2009-2018) but in quarters implying forty (40) observations with raw data from Bank of Uganda and Uganda Bureau of Statistics. Ordinary Least Squares regression was used in order to establish if the variables used significantly affect cement price fluctuations as well as other relevant tests.
The results indicated that approximately 76% of the variation in cement price is explained by the exchange rate, lending interest rate by commercial banks, core inflation rate and the gross domestic product at constant market price. The cement prices in the period of study (2009-2018) averagely registered a slight increase of 18% with regard to the maximum and minimum price while the coefficient of variation was 0.09. Cement prices had a strong positive relationship with variablesthe exchange rate (r=0.80, p<0.05), gross domestic product (r=0.67, p< 0.05) and a very weak positive correlation with the interest rate (r=0.34, p<0.05). The exchange rate with the interest rate, both had a positive impact on cement prices while the inflation rate and the gross domestic product at constant market price had negative impact on cement price respectively in a long-run.
This study concluded that the major cause of fluctuation in cement prices in Uganda was the exchange rate, especially in relation to the U.S dollar followed by the lending interest rate issued by commercial banks.
Since the study has shown that majorly the exchange rate and interest rate influence the prices of cement, it is therefore suggested that government should strive to bring the exchange rate to the barest minimum if not at par with the Uganda shilling. | en_US |
