Foreign Exchange on the Performance of Nigeria Economy:
An Econometric Approach

Akeh; Monica Ukongim.; Asukwo; Joseph Ita.; Bekom Omang; Emefiele; Charles Chike; Nkamare Stephen

doi:https://doi.org/10.56201/ijbfr.v8.no3.2022.pg1.9

📄 Download Paper

Foreign Exchange on the Performance of Nigeria Economy: An Econometric Approach

Akeh, Monica Ukongim., Asukwo, Joseph Ita., Bekom Omang, Emefiele, Charles Chike, & Nkamare Stephen

Abstract

The study empirically examined the effect of foreign exchange on the performance of the Nigeria economy. The specific objectives were to; examine the effect of money supply, inflation rate, trade openness on the performance of Nigeria economy. The study employed ex-post facto research. In line with the main focus of this study, secondary sources of data were used. Ordinary least square of multiple regression technique was adopted to establish the effect of independent on dependent variable. Based on the results, the findings showed that exchange rate, money supply, Inflation and trade openness (TO) had significant effect on the performance of the Nigerian economy, while exchange rate and money supply had a negative effect on the performance of Nigeria economy. The study concluded that exchange rate plays a key role in international economic transactions because no nation can remain in isolation. The study recommended thus: In order to address the negative impact of exchange rate on the economy, there is need for local sourcing of raw materials and input through agriculture and technological policy. By so doing, it will lead to expansion of export base which would attract more foreign exchange into the country. Furthermore, the monetary authority should introduce direct policies of regulating price stability in the economy via regulating money supply in order to decelerate the rising inflationary trend in the economy.

Keywords

Money supplyInflation ratetrade opennessgrowth of Nigeria economyRGDP

References

Adebiyi, J. A. (2012). Employment effect of exchange rate volatility in Nigeria’s manufacturing sector. Journal of Economic Theory, 6(1), 14-25. Aliyu, S. U. (2011). Exchange rate volatility and export trade in Nigeria: an empirical investigation. Munich: RePEc. Arch Asher, O. J. (2012). The impact of exchange rate fluctuation on the Nigeria economic growth (1980 – 2010). Unpublished B.Sc project department of Economics, Caritas University Emene Enugu. Azeez, B. A., Kolopo, F. T. & Ajayi, L. B. (2012). Effect of exchange rate volatility on macroeconomic performance in Nigeria. Interdisciplinary Journal of contemporary Research in Business, 4(1), 149-155. Effiom, L., Ubi, P. S. & Okon, E. O. (2011). Trade liberalization and human capital in Nigeria: vector autoregressive analysis. European Journal of Economics, Finance and Administrative Science, 21(3), 45-70. Ehinomen, C. & Oladipo, T. I. (2012). Exchange rate management and the manufacturing sector performance in the Nigerian Economy. IOSR Journal of Humanities and Social Science.5(5), 1-12. Enekwe, C. I., Ordu, M. M. & Nwoha, C. (2013). Effects of exchange rate fluctuations on manufacturing sector in Nigeria. European Journal of Business and Management, 5(22), 67-73 Etta, B.E. (2011). Effect of price and exchange rate fluctuations on agricultural exports in Nigeria. International Journal of Economic Development Research and Investment, 2(1), 1-10. Khan, M. L. (2010). The sources of real exchange rate fluctuations in Pakistan. European Journal of Social Sciences, 14(1), 34-65. Mohammad, S. D. (2010). The euro-dollar exchange rates and Pakistan macroeconomics dynamics. European Journal of Scientific Research, 42(1), 6-15. Mordi, N. O. (2006). Challenges of exchange rate volatility in economic management in Nigeria: in the dynamics of exchange rate in Nigeria. Central Bank of Nigeria Bullion, 30(3), 17-25. Nnanna. T. (2000). International debt and the stability of the world economy. Washington, D.C. Institute for International Economics. Ojebiyi, A. (2011). Exchange rate volatility: an analysis of the relationship between the Nigerian naira, oil prices, and US dollar. Gotland University, passion and science. 2- 33. Oladipupo, A. O. (2011). Impact of exchange rate on balance of payment in Nigeria. An international multidisciplinary Journal, 5(4),73-88. Opaluwa, D, (2012). The effect of exchange rate fluctuations on the Nigerian manufacturing sector. African Journal of Business Management,4(14), 2994-2998. Owolabi, A.U. (2012). The effect of foreign exchange regimes on industrial growth in Nigeria. Global Advanced Research Journal of Economic, Accounting and Finance, 1(1),1-8.

Foreign Exchange on the Performance of Nigeria Economy: An Econometric Approach

Abstract

Keywords

References

More Articles from IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH