This is one of the con of the current dollar to naira exchange rate today. Exchange rate misalignment under different exchange rate. Uniprojects aim of providing effect of exchange rate fluctuation on the nigeria maufacturing sector project research material is to reduce the stress of moving from one school library to another all in the name of searching for effect of exchange rate fluctuation on the nigeria maufacturing sector research materials. We found that exchange rate has asignificant impact on the balance of payments position. It concludes that the monetary approach to exchange rate. Exchange rate policy vs exchange rate floating exchange rate value of currency is allowed to fluctuate in response to forex market dynamics demand and supply a currencys value is pegged against either the value of another single currency dollar, to a basket of other currencies, or to. The stationary properties of the model were also explored. Nigeria 47 various degrees of trade liberalization recorded in nigeria between 1960 and 2000 on the real exchange rate to see what support it provides for the theory of real exchange rate. This step was taking in order to address nigeria economic malfunctioning. Determinants of inflation, exchange rate, and output in. Over the years, nigeria has adopted various exchange rate regime ranging research work is centered on the impact of exchange rate on the nigeria economic growth with special emphasis on the purchasing power of the average nigeria and the level of international trade transaction.
Uniprojects aim of providing effect of exchange rate fluctuation on the nigeria maufacturing sector project research material is to reduce the stress of moving from one school library to another all. The study extended petersides equation of nigerian multiple exchange rates by aadding more institutional costs bdeducing the dynamic conditi. Effects of exchange rate movements on economic growth in nigeria pdf logo. Determinants of exchange rate variations an exchange rate denotes the value of a nations currency in terms of another currency at a given point in time. Effect of exchange rate fluctuation on the nigeria maufacturing sector project material. Determinants of inflation, exchange rate, and output in nigeria wp98 160 created date. Analysis of inflation and its determinants in nigeria. Pdf analysis of inflation and its determinants in nigeria. The nigerian experience before the introduction of the structural adjustment programme sap in 1986, the country operated a fixed exchange rate regime based on trade and exchange controls, which was anchored through import license controls regime. Theoretically, volatilitytrade link is ambiguous, although a strand of studies reported inverse link between export flow and volatility. Pdf exchange rate volatility and banks performance. The rate that cleared the market marginal rate was adopted as the ruling rate exchange rate for the period, up to the next auction. We use international eurngn exchange rate, and last update was today. The impact of exchange rate on nigeria nonoil exports.
This exchange rate policy is assumed would enhance. A credit card usualy is the easiest way to pay abroad. The long run relationships pertaining to the markets for money, foreign exchange, and non. Floating exchange rate regime and the repercussions of this choice on the whole economy constitute an important issue for the nigerian economy, just as it is for other economies. Modeling and forecasting naira usd exchange rate in nigeria. Abstract this work sets out to examine the relationship between balance of payment and exchange rate. The impact of exchange rate fluctuations on private. The tacticians in the exchange rate war room of the central bank of nigeria cbn then knew that the naira was probably heading in the direction of the zimbabwean dollar. What are the determinants determining factors of real exchange rate in nigeria. Impact of exchange rate on balance of payment in nigeria. According to kinggeorge 20, the effect of exchange rate fluctuations on the nigeria manufacturing sector was set to find out the effect of exchange rate.
Foreign exchange rate is a strong economic indicator for assessing the over all performance of the strength or weakness of an economy. Exchange rate is the value of one currency for the conversion to another foreign used to send money on international transfers. The impact of exchange rate fluctuations on private domestic. In this respect, this study attempts to assess the relevance of the. You might want to consider not to bring to much money. The empirical model and estimation is presented in section 4, while section 5 summarizes, and concludes the paper. The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. This pdf is a selection from an outofprint volume from the national bureau of economic research volume title. A major factor in the real exchange rate appreciation was the sharp increase in oil prices and foreign exchange inflows. Get free research paper on impact of exchange rate policy on nonoil exports in the nigerian economy 19992014 project topics and materials in nigeria.
The study examines money supply and inflation rate in nigeria. Estimating the determinants of nigerias real exchange rate dynamics 323 2008m12 1. Please, sit back and study the below research material carefully. The impact of exchange rate fluctuation on the nigerian. Hausa and fulani 29%, yoruba 21%, igbo ibo 18%, ijaw 10%, kanuri 4%, ibibio 3. The effect of fluctuating foreign exchange rate on nigeria currency a case study of central bank of nigeria, enugu branch, largest undergraduate projects repository, research works and materials.
The official exchange rate is determined by the monetary authority. Apr 03, 2017 this study is limited to exchange rate and its effect on balance of payment with reference to the nigeria economy. Impact of exchange rate on industrial production in. Nigeria s former military rulers failed to diversify the economy away from its overdependence on the capitalintensive oil sector, which provides 95% of foreign exchange earnings and about 80% of budgetary revenues. Exchange rate policy vs exchange rate floating exchange rate value of currency is allowed to fluctuate in response to forex market dynamics demand and supply a currencys value is pegged against either the value of another single currency dollar, to a basket of other currencies, or to another measure of value, such as gold. The worst day for conversion of 200 euro in nigerian naira in last 10 days was the 16052020.
The results estimated in table 1 above examined empirically the determinants of exchange rate variations in nigeria. The exchange rate is the price of one currency in terms of another currency, that is, the current market price for which one national currency can be exchanged for another. Impact of exchange rate on the nigeria economic growth project material. In section 2, exchange rate polices in nigeria are discussed. Online converter show how much is 200 euro in nigerian naira. Her exchange rate determination has taken various shapes from administratively deformed rate to a market determined rate.
Effect of exchange rate fluctuations on manufacturing. The movement in the domestic output of the nigerian industrial sector is dominated by fluctuation in real exchange rate. You probably need to change money when traveling to niger. Exchange rate depreciation and nigeria economic performance after structural adjustment programmes saps ismaila, mohammed ph. The determinants of real exchange rate volatility in nigeria ajao, mayowa g.
Cbn lists inflation, others as determinants of exchange rate. The determinants of real exchange rate volatility in nigeria. Nigeria overall economic performance since independence in 1960 has been decidedly unimpressive. This paper therefore, investigates the determinants of real exchange rate volatility in nigeria from 1981 through 2008. Impact of exchange rate on industrial production in nigeria. Obafemi department of economics university of calabar p.
Nigeria abandoned a fixed exchange rate regime in favour of floating exchange in 1986. People have not been investing due to exchange rate volatility. A perfect example of the current dollar to naira exchange rate against nigerians is the on going payment. This is approved for students in accountancy, business, computer science, economics, engineering, arts. Exchange rate behaviour and trade balances in nigeria. The paper employed fundamental analysis where the flow of non oil exports from the nigerian economy is assumed to be predicated on fundamental.
Exchange rate misalignment under different exchange. It is 1 foreign exchange rate1 1 contributors to this series are. Trend analysis of nigerias trade flows and exchange rate dynamics this section presents some trend analysis on nigerias export and imports in order to convey more information on the relationship between trade flows and exchange rate dynamics in nigeria. Analysis of the effect of exchange rate on manufacturing industries in nigeria 19852006 analysis of the effect of exchange rate on manufacturing industries in nigeria 1985 2006 table of contentstitle page certification dedication acknowledgement table of contents abstract chapter one introduction. Ajao and igbekoyi 20 estimate and test the determinants of real exchange rate volatility in nigeria for the period 19812008 using the ecm technique. Therefore, the main objective of this study is to find out how some macroeconomic variables impact on exchange rate in nigeria using us dollar. Online converter show how much is 75 euro in nigerian naira. Small and mediumscale enterprise development in nigeria by d. The results revealed that money supply and exchange rate were stationary at the. Convert 75 eur to ngn to get actual value of this pair of currencies. Having obtained the volatility of exchange rate through the garch 1,1 techniques, the ecm was used to examine.
The naira exchange rate depreciation and volatility is among the vast macroeconomic maladjustments which have unfolded in the nigerian economy in the recent past. These have also be associated with deficient problems. Basically, the foreign exchange is one of the most nigeria cbn to bring about the nation stable foreign exchange rate for economic growth and development. Effect of exchange rate fluctuation on the nigeria. Effects of exchange rate movements on economic growth in. Exchange rate volatility and export trade in nigeria. The importance of exchange rate determinants cannot be overemphasized when dealing with international or open economics. The real exchange rate of nigeria naira has significant effect on domestic output growth.
Determinants of inflation, exchange rate, and output in nigeria. This study evaluated the possibility of exchange rate convergence in nigeria through the institutional differences that segment the nigeria forex market. An exchange rate is the value of a nations currency in terms of the currency of another nation or economic zone. The naira exchange rate depreciation and volatility is among the vast macroeconomic maladjustments which have unfolded in the nigerian economy in the. There are two main types of exchange rates in nigeria. This paper therefore, investigates the determinants of real exchange rate volatility in nigeria. Nigeria is an open monoculture economy that is overdependent on crude oil. Also, government evolved a system whereby exchange rate was determined on a daily basis in an interbank system under the supervision of the central bank of nigeria. Monday, june 20, 2016 marked the first day of trading following nigerias abandonment of its currency peg of 197199 naira to the u. This paper presents a macroeconomic model of the nigerian economy. This paper empirically investigates the impact of exchange rate on thenigeria external sector the balance of payments position using theordinary least square ols method of estimation for data covering theperiod between 1970 and 2008. Evidence from nigeria article pdf available in international journal of business, economics and management 24 january 2016 with 6,023 reads.
Foreign exchange rate central bank of nigeria home. Impact of exchange rate on the nigeria economic growth. The impact of exchange rate fluctuations on private domestic investment performance in nigeria doi. The rest of the paper is presented in four sections. Pdf determinants of exchange rate sensitivity on the. The impact of exchange rate fluctuation on the nigeria economic growth 1980 2010 abstract this research work is centred on the impact of exchange rate fluctuation on the nigerias economic growth with special emphasis on purchasing power of the average nigeria and the level of international trade transaction. Secondary data that ranged between 19702008 were sourced from the cbn statistical bulletin. In 2009, the federal government of nigeria liberalized the exchange rate system. It is the required amount of units of a currency that can buy another amount of units of another currency. The long run impact of oil prices on nigerias exchange rates are the subject of this study. Forecast of exchange rate determinants in nigeria projectclue. Uniprojects aim of providing impact of exchange rate on the nigeria economic growth project research material is to reduce the stress of moving from one school library to another all in the name of searching for. According to kinggeorge 20, the effect of exchange rate fluctuations on the nigeria manufacturing sector was set to find out the effect of exchange rate on the nigeria manufacturing sector.
The study examines the determinants of exchange rate in nigeria comparing the official exchange rates and the parallel market rates from the post sap era of 1986 to 2017 using quarterly time. Exchange rate and macroeconomic performance in nigeria. May 03, 2017 this is one of the con of the current dollar to naira exchange rate today. As a result of these problems, the government through the help of the cbn central bank of nigeria tries to regulate the exchange rate system.
Nigeria pulled out of its imf program in april 2002, after failing to meet spending and exchange. The exchange rate depreciation can actually lead to improved balance. B 1115, calabar nigeria abstract the study estimated the effect of exchange rate on the balance of trade of nigeria for the period 19702012 using annual data. Factors that affects the nigeria naira and its foreign. He gave an instance when the inflation rate moved from 7.
It is my greatest pleasure to present this paper at the foreign exchange seminar organized by the chartered institute of bankers of. D department of economics, ambrose alli university, ekpoma, nigeria tel. To this end, it applies the necessary frame of analysis over the nigerian data through 19872001. Convert 200 eur to ngn to get actual value of this pair of currencies. The west african cfa franc which has the iso of xof see west african cfa franc exchange rate top 10 money transfers to niger on. Gdp per capita and exchange rate in nigeria while in the short run, money supply has a significant positive one. Effects of exchange rate movements on economic growth in nigeria. In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. The longrun relationships pertaining to the markets for money, foreign exchange, and non.
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