Impact of Monetary Policies on Export Sector Performance in Nigeria (Published)
This study revalidates the nexus between monetary policies and export sector performance in Nigeria from 2014 to 2023. The series is sourced from Central Bank of Nigeria (CBN) Statistical Bulletin. The stationary series of the generated residual prompts the adoption of the Error Correction Model (ECM). The variables considered in the model includes export value, real effective exchange rate, maximum lending rate, money supply, credit to core private sector, gross domestic product and consumer price index. The stationarity of the residual using Augmented Dickey Full unit root test established the existence of the relationship among the series considered in the model. The findings reveal that historical export levels are the primary predictor of current export behavior, while exchange rates positively influence export sector performance. The analysis also uncovers that monetary conditions, particularly reduced private sector credit access and negative money supply effects, create significant constraints on export growth, suggesting the need for targeted financial sector reforms to enhance export sector.
Keywords: Exchange Rate, Monetary Policies, Money Supply, export sector performance, maximum lending rate
Impact of Monetary Policy on Exchange Rate Stability in Nigeria (Published)
This study investigates the impact of interest rates, money supply, and Central Bank reserves on exchange rate stability in Nigeria. Utilizing quarterly economic data from 1980 to 2023, sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin, the research employs a longitudinal survey design to assess the relationships between these monetary variables and exchange rate volatility. The findings indicate that interest rates, money supply, and Central Bank reserves significantly influence exchange rate fluctuations, with Central Bank reserves having the most substantial impact. Specifically, interest rates exhibit a moderate effect on exchange rate volatility (t = 3.513, p = .001, Beta = .342), while money supply also significantly affects exchange rate volatility (t = 2.713, p = .010, Beta = .305). Central Bank reserves, however, have the most pronounced impact (t = 4.141, p = .000, Beta = .467). These results highlight the critical role of monetary policy in maintaining exchange rate stability. The significant positive relationship between interest rates and exchange rate volatility suggests that monetary authorities should carefully consider the ramifications of interest rate adjustments. Similarly, the influence of money supply underscores the need for meticulous management to prevent destabilization. Robust Central Bank reserves emerge as a crucial buffer against exchange rate fluctuations, emphasizing the importance of effective reserve management policies. The findings provide actionable insights for policymakers aiming to enhance exchange rate stability through strategic interest rate policies, careful money supply management, and maintaining adequate Central Bank reserves.
Keywords: Central Bank of Nigeria., Economic Management, Exchange Rate Volatility, Interest rates., Monetary Policy, Money Supply, central bank reserves, exchange rate stability
Currency devaluation on the Exportation Revenue: A study of Nigeria, South Africa and China (2000-2017) (Published)
The study examines the impact of currency devaluation on total export revenue in Nigeria, South Africa and China. Secondary data were sourced from World Bank Data Atlas for inflation rate (INFR), exchange rate (EXR), money supply (MS) and total export revenue (TER) for the period of 2000 to 2017 and were subjected to Augmented Dickey Fuller and Philip Perron Unit Root test, Johansen Co-integration and Vector Error Correction Model. The study discovers that EXR, INFR and MS were unable to impact exportation revenue in Nigeria and South Africa while showing strong impact on exportation revenue of China. The result also shows that only China enjoys long run relationship while Nigeria and South Africa currency devaluation variables showed absence of long run relationship with exportation revenue. Thus, the study concludes that currency devaluation in China impact negatively on the export position of Nigeria and South African economies. Hence, the study recommends maintenance of China’s currency devaluation position while Nigeria and South Africa should re-evaluate and re-adjust their currency devaluation procedures to improve exportation revenue.
Keywords: Currency depreciation, Exchange Rate, Inflation Rate, Money Supply, exportation performance