The Impacts of Exchange Rate Volatility on Agro-Processing Industry Performance: Evidence from Profeeds 2013 to 2022

The study’s goal was to investigate the effects of exchange rate on the quarterly averaged performance of Profeeds private limited company in Zimbabwe from January 2013 to December 2022. Firstly this study sort to examine how foreign exchange rate volatility affected the performance of private companies in Zimbabwe, and secondly, the study aims to determine whether any other secondary factors of company characteristics, such as size, could have had a contributory effect on the performance of the companies over the period in question. The study used quantitative analysis of data using multi regression analysis. Firstly, the research’s findings demonstrated that Zimbabwe’s private companies’ performance was affected positively by exchange volatility, return on assets, and other internal factors during the study period.  External factors had a role in the performance of the company over the period in question.  Over the course of the study period, the correlation results revealed a shaky positive relationship between foreign exchange volatility and company profits. Using desktop evidence, throughout the entire study period, the Zimbabwean dollar followed a stochastic pattern with brief periods of appreciation and stability. Furthermore, a connection between changes in inflation rates and exchange rate volatility was discovered. Since there was little correlation between inflation and profitability, the Zimbabwean dollar lost value as inflation rates rose against the US dollar. This made it possible for the return on assets to increase.  This research advocates for numerous economic, business, and governmental policies resulting from the discoveries. Singularly, management of companies doing business in Zimbabwe must take precautions to limit their exposure to foreign exchange risk. According to the study, higher levels of foreign exchange volatility hurt businesses’ financial results and decrease their market value over time.