Exchange rate volatility and non-oil exports in Nigeria: An empirical investigation
DOI:
https://doi.org/10.24191/jeeir.v5i2.6269Keywords:
Non-oil export, Exchange rate volatility, Trade, ARCH-type modelsAbstract
The adoption of a flexible exchange rate system since 1986 in Nigeria has made the country witnessed varying rate of the naira vis-à-vis the U.S dollar. This paper examines exchange rate volatility with ARCH model and its various extensions (GARCH, TGARCH, and EGARCH) using quarterly exchange rate series from 1986-Q1 to 2014-Q4.The impact of exchange rate volatility on non-oil exports was also examined using Error Correction Model (ECM) with two different measures of volatility. The results obtained confirm the existence of exchange rate volatility and also found a significant negative effect on non-oil export performance in Nigeria. Therefore, the Nigerian government should ensure an appropriate policy mix that not only ensures a stable and realistic exchange rate but also conducive atmosphere for production and exportation.
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Copyright (c) 2017 Sa’ad Babatunde Akanbi, Halimah Adedayo Alagbe, Hammed Agboola Yusuf, Musibau Hammed Oluwaseyi
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