13th Students’ Research Symposium 2023/2024
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/29096
Browse
2 results
Search Results
Item The Impact of Monetary Policy on Stock Market Performance: Evidence from Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Nimesha, A. T.; Piyananda, S. D. P.Introduction: The study explores the pivotal role of monetary policy in shaping stock market performance, focusing on Sri Lanka's All Share Price Index (ASPI). It highlights the critical influence of monetary tools like Treasury Bill Rate (TBR), Money Supply (M2), Standing Lending Facility Rate (SLFR), and Statutory Reserve Ratio (SRR) alongside macroeconomic variables like the Exchange Rate and Inflation Rate. By addressing the gaps in existing literature, particularly during the post-COVID-19 economic crisis, the research emphasizes the dynamic interplay between monetary policy and market performance. Methodology: This will be a quantitative test based on secondary data from July 2014 to August 2024, which was extracted from the Colombo Stock Exchange and Central Bank of Sri Lanka. Analyzing the research will draw upon econometric methods which include tests of unit roots, regression analysis, and diagnostic checks for multicollinearity, heteroskedasticity, and autocorrelation in order to draw conclusions about how monetary policy variables affect the ASPI. The model has been developed considering its robustness and reliability by incorporating all the required macroeconomic indicators as control variables. Findings: The above analysis indicates that monetary policy variables such as money supply, treasury bill rate, and inflation rate are positively and significantly related to ASPI. Thereby, these variables prove to be the important contributors toward improving stock market performance in Sri Lanka. On the contrary, SLFR and ER negatively influence ASPI, reflecting the devastating effects of the tight monetary stance and currency depreciation on market dynamics. The contribution of the SRR, though positive, is insignificant to explain the trend in the stock market. All diagnostic tests prove that the estimated model is reliable and free from multicollinearity, heteroskedasticity, or autocorrelation. The findings emphasize that monetary policy does not have a one-way effect on the stock market in Sri Lanka. Conclusion: Monetary policy significantly influences the performance of the stock market in Sri Lanka; therefore, proper monetary interventions are very important in creating a stable and prosperous market. Though the findings support theoretical expectations and prior literature on the subject, there are limitations to this present study, which include exclusion of some of the key macroeconomic variables, such as fiscal policy, and also sector-specific analysis. Thus, future study could elaborate more on those dimensions and create more comprehensive insights. These are very important findings in terms of the policy implications for policymakers and investors in developing an appropriate view of how monetary policy affects stock performance in emerging economies.Item The Impact of Digital Financial Inclusion on Economic Development in Sri Lanka(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Wijesiriwardhana, H. G. S. I.; Piyananda, S. D. P.Introduction: Digital financial inclusion refers to the use of digital platforms such as mobile banking, digital wallets, and online payment systems to expand access to financial services, especially for underserved and rural communities. In the context of Sri Lanka, a developing economy, digital financial inclusion plays a critical role in fostering economic growth and addressing financial disparities. This research investigates the impact of digital financial inclusion on economic development in Sri Lanka while accounting for control variables such as inflation and interest rates. Methodology: The study adopts a quantitative approach, using EViews software to analyze the relationship between digital financial inclusion and economic development. Control variables such as inflation and interest rate are incorporated to isolate the specific effects of digital financial services on broader economic outcomes. The study was derived data collected through published reports from the Central Bank of Sri Lanka. Specifically, the sample size consists of time-series quarterly data over a 10-year period (2014–2023), representing the key indicators and trends relevant to digital financial inclusion and economic development. The analysis was conducted using descriptive statistics, correlation analysis, and regression analysis with the pretests. As well, the researcher discussing the hypotheses based on the results obtained from the regression analysis. Findings: The findings of the study have important policy implications for governments and financial institutions in Sri Lanka, offering recommendations on how to harness digital financial inclusion to foster economic development, reduce inequality, and enhance financial resilience in the face of global challenges. Ultimately, the study contributes to the growing body of literature on the role of digital finance in economic development, particularly in emerging economies like Sri Lanka. Conclusion: This research underscores the intricate relationship between digital financial inclusion (DFI) and economic development in Sri Lanka. While mobile subscriptions and internet access alone have limited impact, their effectiveness depends on complementary factors such as digital literacy, infrastructure quality, and policy support. The study reveals ATM availability significantly contributes to GDP per capita by bridging traditional and digital banking gaps, while debit card usage poses challenges due to insufficient infrastructure. Conversely, credit card usage positively influences economic growth by promoting digital transactions and enhancing financial integration. These findings highlight the need for holistic strategies to optimize DFI's role in sustainable economic development in Sri Lanka.