The impact of import substitution policy on trade and exchange rate: An empirical analysis from Ghana

This research examines the impact of import substitution policy on trade balance and exchange rate in Ghana by employing macroeconomic variables – inflation interest rate. For a robustness check, is analyzed using augmented magnitude approaches. The study utilizes quarterly data from 1990Q1 to 2021Q1 applies Johansen cointegration test vector error correction model estimate dynamics impact. results show that boosts capacity domestic production improves balance. Also, reveals both international reserves have symmetric negative at statistically significant level 1%, ceteris paribus. implies implementation would ensure appreciation or stabilization currency value without depleting long-run.   Key words: Exchange rate; balance; reserves; substitution.