Foreign Exchange Income and Financial Performance of Deposit Money Banks in Nigeria (Published)
The study examined the effect of foreign exchange income on financial performance of deposit money banks in Nigeria. The specific objectives of the study were to ascertain the effect of nominal exchange rate, real exchange rate, and exchange rate on return on asset of deposit money banks in Nigeria. nominal exchange rate, real exchange rate, and exchange rate were the independent variables, while return on asset was the dependent variable. The study adopted an ex-post-facto research design, covering the period between 2011 and 2020. Secondary data were extracted from the annual reports and accounts of sampled deposit money banks in Nigeria. Multiple regression techniques were used for test of hypotheses. From the data analysis, it was revealed that nominal exchange rate has a significant negative effect on return on asset of deposit money banks in Nigeria. real exchange rates have a significant positive effect on return on asset of deposit money banks in Nigeria. However, exchange rate has a nonsignificant negative effect on return on asset of deposit money banks in Nigeria. This implies that among the foreign exchange income variables, nominal exchange rate and real exchange rate can be used to predict return on asset of deposit money banks in Nigeria. The study, therefore, recommends that federal money the sources of deficit financing. They should reduce their public debt so as to allow foreigners invest in securities with naira denomination. They should reduce the extent the deplete our foreign exchange reserve because such moves increase the exchange rate, which affects banks performance negatively. The central bank of Nigeria and the ministry of finance should reduce the rate they give out dollars to politicians because it affects our exchange rate and banks’ performance negatively.
Keywords: Deposit Money Banks, Exchange Rate, Nominal exchange rate, Real Exchange Rate, Return on Asset
The Analysis of Factors Affecting CPO Export Price of Indonesia (Published)
This study aims to determine and analyze the influences of world crude oil price shocks, world soybean oil prices, world CPO prices, palm oil TBS prices and the exchange rate of rupiah/US dollar towards the transmission on CPO export prices of Indonesia. This study uses quantitative analysis model with the approach of vector autogression model (VAR) which includes three main analysis tools namely Granger causality test, impulse response function (IRF) and forecast error decomposition of variance (FEDV). The variables which are used in this research are world petroleum price, world soybean oil price, CPO price of Rotterdam, CPO export price of Indonesia, fresh fruit bunch price and real exchange rate (real exchange rate). From Granger Causality test result, The price transmission process takes place the plot as follows: world crude oil prices significantly influence the CPO price of world (Rotterdam) which will significantly influence the world soybean oil prices and so on have a significant influence on the value of the real exchange rate which will influence the price of fresh fruit bunches and ultimately have a significant influence on CPO price export of Indonesia. From the estimation result of VAR model, there are significant influences of world crude oil price shocks, world soybean oil prices, world CPO prices, palm oil TBS prices and rupiah/US dollar exchange rates simultaneously to the transmission on CPO export prices of Indonesia. Based on analysis of Impulse response and variance decomposition, in the first period, one hundred percent average variability of CPO export price growth is significantly explained by the average growth of CPO export prices itself. In the subsequent period, the average variability of CPO export price growth is significantly explained by the average growth of CPO export price itself as well as other variables.
Keywords: : Petroleum Price, CPO export price, Granger Causality, Price Transmission, Real Exchange Rate, Soybean Oil Price, TBS, VAR, Variance Decomposition, impulse response function