Abstract
The volatility displayed by floating exchange rates has revived interest in the relationship between exchange rates and traded goods prices. This study examines sectoral exchange rate pass-through in the Nigerian economy. Findings revealed that sectoral dependence on imports varies across sectors. We find evidence of incomplete pass-through at varying degrees across sectors. Therefore, when adjustment in relative prices is dampened, the incentive for consumers to switch expenditure from foreign to domestic goods will be greatly reduced. This implies that exchange rate policy may be a blunt instrument when used to restore external balance since relative price adjustments will be limited.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: International Journal of Economic Policy in Emerging Economies
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.