| Title: | Macroeconomic Indicators And Exchange Rate In Nigeria |
| Author(s): | Ezebunwo Nyeche, Victor Akidi & Ruth Ginse Ekpa |
| Abstract: | The effect of macroeconomic indicators on exchange rate has attracted considerable research interests in recent times. This is because interplay of macroeconomic indicators serves as barometer for measuring exchange rate. This study empirically examines the effect of selected macroeconomic indicators on exchange rate in Nigeria between 1985 and 2022 using Autoregressive Distributed Lag (ARDL) technique. The study proxy exchange rate by real exchange rate while the selected macroeconomic indicators used are real gross domestic product, money supply, degree of openness and gross fixed capital formation. The study made use of time series data which were sourced from Central Bank of Nigeria (CBN) statistical bulletin. The study tested for stationarity of the time series data with Augmented Dickey Fuller statistic and the result suggested a mixed order of integration. The result of the ARDL showed that real gross domestic product, money supply and gross fixed capital formation have positive and significant effect on real exchange rate in Nigeria while degree of openness has a negative and non-significant effect on real exchange rate in Nigeria. Based on these findings, the study therefore, concluded that macroeconomic indicators play a significant role in exchange rate in Nigeria. The study recommended among others that Central Bank of Nigeria should formulate effective monetary and fiscal policies that will stabilize the Naira against other currencies especially Dollars and Pounds Sterling as well as allow such policies to complete their gestation period before subjecting them to change; government should put in place monetary and fiscal policies that would bring about stability in exchange rate; and that government should formulate policy that is aimed at raising broad money supply; which will in turn encourage and increase investment activities in the country and bring about appreciation in exchange rate. |
| Keywords: | Real Exchange Rate, Real Gross Domestic Product, Money Supply, Degree of Openness, Gross Fixed Capit |
IJAAMSThe International Journal of Applied Economics, Agriculture and Management Sciences (IJAAMS) is a publication of the Department of Agricultural & Applied Economics of the Rivers State University, Port Harcourt, Rivers State, Nigeria [...]
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