ABSTRACT
The study examined the effect of currency redesign on national economic indices. The research employs an event study approach, which is rooted in the aspiration to measure the impact of a distinct event. The result showed that currency redesign in Australia caused both GDP per capita and market capitalisation to fluctuate more in the post-event period, when compared to the pre-event period. However, the responses of GDP per capita was very highly volatile both pre-event and post-event and it exerted a significant influence on market capitalisation, real interest rate, inflation, and money supply respectively, while its effect on GDP per capita was found to be statistically insignificant throughout the extended event window; currency redesign in Brazil, Malaysia caused both GDP per capita and market capitalisation to fluctuate both in the short-term and the long-term event and exerted a significant influence on money supply, inflation rate, market capitalisation, real interest rate, GDP per capita, life expectancy at birth and exerted a significant influence on all the macroeconomic; and in Malaysia a significant influence on all the economic indicators.. The effect of the policy especially on GDP per capita was more pronounced than the other variables which caused it to fluctuate both pre- and post-event, both in the short-term and the long-term event. The findings also revealed that currency redesign policy in Mexico exerted a significant influence on all the economic indicators throughout the extended event window. In South Africa it caused both GDP per capita and market capitalisation to fluctuate pre- and post-event, both in the short-term and the long-term event and exerted a significant influence on inflation rate, real interest rate, money supply, GDP per capita, market capitalisation and life expectancy; and exerted a significant influence on all the economic indicators. In Switzerland, it caused both market capitalisation and GDP per capita to fluctuate pre- and post-event and also exerted a significant influence on real interest rate, GDP per capita, money supply market capitalisation, inflation rate, life expectancy, exerted a significant influence on all the economic indicators.
