Naira Exchange Rate Research Articles

Exchange Rate Depreciation and Government Policy in Nigeria: An Empirical Evidence (1980-2008)

This paper examines the Nigeria’s exchange rate depreciation and government policy in Nigeria. From the government policies point of view, we observed that, the understudied variables contributed significantly to exchange rate depreciation, and the timely control of these variables as recommended will to a great extent produce the desired appreciation of the naira exchange rate. However, this is only a microscopic aspect of whole lots of disturbances to the exchange rate. This paper adopts multiple regression analysis with Ordinary Least Squares method of estimation. The outcome of the results was enticing, indicating that, the expansionary monetary and fiscal policies pursued by the government and the constant interference of government in the market-driven economy resulted to dislocation and/or depreciation in the exchange rate. The ugly situation can only be corrected, when we look into the recommendations proffered in this paper.

Exchange Rate Volatility and Export Trade in Nigeria: An Empirical Investigation

The paper seeks to quantitatively assess the impact of exchange rate volatility on non oil export flows in Nigeria. Theoretically, volatility-trade link is ambiguous, although a strand of studies reported inverse link between export flow and volatility. The paper employed fundamental analysis where the flow of non oil exports from the Nigerian economy is assumed to be predicated on fundamental variables: the naira exchange rate volatility, the US dollar volatility, Nigeria's terms of trade (TOT) and index of openness (OPN). Empirical results showed presence of unit root at level, however, the null hypothesis of nonstationarity was rejected at first difference. Cointegration results revealed that a stable long run equilibrium relationship exists between non oil exports and the fundamental variables. Using quarterly observations for twenty years, vector cointegration estimate revealed that the naira exchange rate volatility decreased non oil exports by 3.65% while the same estimate for the US dollar volatility increased export of non oil in Nigeria by 5.2% in the year 2003. The paper recommends measures that would promote greater openness of the economy and exchange rate stability in the economy.

Macroeconomic stabilization and monetary policy nexus in Nigeria

This paper develops the Central Bank reaction function and investigates the extent to which the Central Bank of Nigeria in recent years has been successful in addressing adverse changes in prices and the naira exchange rate. The result indicates that the CBN was successful in controlling inflation and depreciation of the naira in foreign exchange market. However, there was a large lag in the responsiveness of the monetary authorities to adverse changes in the economic environment. The study recommends among others that the current autonomy status granted the CBN should be strengthened and sustained.Global Journal of Social Sciences Vol. 6 (1) 2007: pp. 37-43