Abstract
In this paper, the Nigerian External Reserve (ER) for the period 1960 – 2010 was modeled using descriptive time series technique and Box-Jenkins (ARIMA) model. Prior to the analysis the logarithm transformation was found to be the most appropriate to stabilize the variance of the data after the Bartlett's test of homogeneity of variance suggested non-constant variance. Applying the descriptive time series technique on the transformed data, a linear trend was found adequate which suggest an exponential trend for the untransformed data. However, the seasonal indexes were found to be insignificant which implies that the data is completely dominated by the trend. Furthermore, considering that the model obtained using the descriptive time series technique was found inadequate as suggested by the autocorrelation function (ACF) of the irregular component and therefore cannot be used for forecasting, a Box-Jenkins model was then fitted and was found adequate as suggested by the p-value = 0.00 for the modelsignificance. Furthermore using the Relative Percentage Change (RPC) to assess the impact ofthe various regimes on the ER data, it was found that the regimes of General Yakubu Gowon (Rtd) and Alhaji Shehu Shagari respectively had the most positive and negative impact on the ER data. Finally using the cumulative RPC in assessing the impact of civilian and military regimes on the ER data, it was discovered that the military had a higher positive impact than the civilian regimes.
Highlights
External reserves (ER), variously called International reserves, Foreign reserves or Foreign exchange reserves has several definitions, but the most widely accepted is the one proposed bythe IMF in its balance of payments manual, 5th edition
On cumulative basis, civilian regime had an Relative Percentage Change (RPC) of 665.8% while that of military is 3737.0% which implies that military regimes had impacted more positively on Nigerian ER than the civilian regimes
We modeled the Nigerian external reserve (ER) data for the period 1960 – 2010 using descriptive time series technique and Box-Jenkins (ARIMA) model
Summary
External reserves (ER), variously called International reserves, Foreign reserves or Foreign exchange reserves has several definitions, but the most widely accepted is the one proposed bythe IMF in its balance of payments manual, 5th edition. It defined ER as “consisting of official public sector foreign assets that are readily available to, and controlled by the monetary authorities, for direct financing of payment imbalances, and directly regulating the magnitude of such imbalances, through intervention in the exchange markets to effect the currency exchange rate and/or for other purposes. The period beginning from the later end of 1999 marked a turning point from hitherto culture of fiscal misappropriation characterized by reckless spending to a new era of
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
