Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from Nigeria
We analyzed the effect of volatility in the Naira-Dollar exchange rate on the volume of imports to and exports from Nigeria between 1990 and 2019. Data for all variables, except volatility, were sourced from the Central Bank of Nigeria (CBN), the National Bureau of Statistics (NBS), and the Interna...
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| Format: | Article |
| Language: | English |
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EconJournals
2021-09-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | http://mail.econjournals.com/index.php/ijefi/article/view/11799 |
| _version_ | 1797911447471128576 |
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| author | Mela Yila Dogo Osman Nuri Aras |
| author_facet | Mela Yila Dogo Osman Nuri Aras |
| author_sort | Mela Yila Dogo |
| collection | DOAJ |
| description |
We analyzed the effect of volatility in the Naira-Dollar exchange rate on the volume of imports to and exports from Nigeria between 1990 and 2019. Data for all variables, except volatility, were sourced from the Central Bank of Nigeria (CBN), the National Bureau of Statistics (NBS), and the International Financial Statistics. The volatility of the naira exchange rate was calculated from the model. The study employed both the autoregressive distributed lagged (ARDL) and exponential generalized autoregressive conditional heteroscedasticity (EGARCH) models to test for the short and long-run relationships between changes in the Naira-Dollar exchange rate and the volume of imports and exports. Volatility in the Naira-Dollar exchange rate was found to be related to the volume of imports to and exports from Nigeria in the long run with no short-run effects because of the pass-through effect to domestic inflation. The study recommends that government should sustain efforts at promoting exports and reducing imports to improve the trade balance. The study brings into perspective another way of looking at the long-run relationship between the Naira-Dollar exchange rate and Nigeria's trade balance.
Keywords: Foreign exchange rate, foreign exchange market, Imports, Exports, The balance of trade, Nigeria.
JEL Classifications: F14, F31, 024.
DOI: https://doi.org/10.32479/ijefi.11799
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| first_indexed | 2024-04-10T11:40:47Z |
| format | Article |
| id | doaj.art-62369bfa0a3342118c1282d92e4a3485 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T11:40:47Z |
| publishDate | 2021-09-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-62369bfa0a3342118c1282d92e4a34852023-02-15T16:17:33ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382021-09-01115Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from NigeriaMela Yila Dogo0Osman Nuri Aras1Nile University of Nigeria, AbujaNile University of Nigeria We analyzed the effect of volatility in the Naira-Dollar exchange rate on the volume of imports to and exports from Nigeria between 1990 and 2019. Data for all variables, except volatility, were sourced from the Central Bank of Nigeria (CBN), the National Bureau of Statistics (NBS), and the International Financial Statistics. The volatility of the naira exchange rate was calculated from the model. The study employed both the autoregressive distributed lagged (ARDL) and exponential generalized autoregressive conditional heteroscedasticity (EGARCH) models to test for the short and long-run relationships between changes in the Naira-Dollar exchange rate and the volume of imports and exports. Volatility in the Naira-Dollar exchange rate was found to be related to the volume of imports to and exports from Nigeria in the long run with no short-run effects because of the pass-through effect to domestic inflation. The study recommends that government should sustain efforts at promoting exports and reducing imports to improve the trade balance. The study brings into perspective another way of looking at the long-run relationship between the Naira-Dollar exchange rate and Nigeria's trade balance. Keywords: Foreign exchange rate, foreign exchange market, Imports, Exports, The balance of trade, Nigeria. JEL Classifications: F14, F31, 024. DOI: https://doi.org/10.32479/ijefi.11799 http://mail.econjournals.com/index.php/ijefi/article/view/11799 |
| spellingShingle | Mela Yila Dogo Osman Nuri Aras Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from Nigeria International Journal of Economics and Financial Issues |
| title | Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from Nigeria |
| title_full | Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from Nigeria |
| title_fullStr | Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from Nigeria |
| title_full_unstemmed | Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from Nigeria |
| title_short | Effect of Volatility in the Naira - Dollar Exchange Rate on the volume of Imports to, and Exports from Nigeria |
| title_sort | effect of volatility in the naira dollar exchange rate on the volume of imports to and exports from nigeria |
| url | http://mail.econjournals.com/index.php/ijefi/article/view/11799 |
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