Impact of Dollar on Naira Exchange Rate on Consumer Purchasing Power in Nigeria

Iyadi Rollins Chiyem (Ph.D); Uyo Emmanuella Elozino

doi:10.56201/jbae.v10.no5.2024.pg81.95

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Impact of Dollar on Naira Exchange Rate on Consumer Purchasing Power in Nigeria

Iyadi Rollins Chiyem (Ph.D), Uyo Emmanuella Elozino

Abstract

This study examines the impact of exchange rate fluctuations and inflation on consumer purchasing power in Asaba, Delta State, Nigeria. A cross-sectional survey research design was employed, with data collected from 80 households using a structured five-point Likert scale questionnaire. Simple random sampling was used to select respondents, ensuring a representative sample. The results reveal that 78% of respondents believe exchange rate fluctuations have reduced their ability to purchase essential goods, while 88% report that inflation has further weakened their purchasing power. Statistical analysis indicates a strong positive correlation between exchange rate fluctuations and consumer purchasing power (r=0.586, p<0.01), and a negative correlation with inflation (r=0.260, p>0.01). These findings are consistent with previous research, highlighting the significant effect of exchange rate instability and inflation on the financial security of households. The study concludes that both factors considerably affect consumers' ability to maintain their standard of living and recommends that the government implement policies to stabilize the exchange rate, control inflation, and promote financial literacy to mitigate these effects.

Keywords

Exchange Rate FluctuationsConsumer Purchasing PowerInflation

References

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Impact of Dollar on Naira Exchange Rate on Consumer Purchasing Power in Nigeria

Abstract

Keywords

References

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