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Exchange Rate Fluctuation And Export Performance In Nigeria

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ABSTRACT

This paper “exchange rate fluctuation and e determine the effect of foreign exchange dynamism on the country’s export performance from 1961-2011. Research results from the economic tool of regression analysis obtained shows that fluctuations in the naira exchange rate affect manufacturing and agricultural exports more than it affects oil export. To reduce the impact of this fluctuations on these export, monetary authorities in Nigeria should stabilize the naira exchange rate through monetary and fiscal policies, exporters should take advantage of the futures worked to eliminate the negative effects of this fluctuations on export income and performance, and fiscal and monetary policies should be initiated by the government to increase local production to meet local consumption, reducing foreign exchange demand for import consumption and reduce pressure on the naira exchange rate.

 

TABLE OF CONTENT

Title Page                                                                                                                     i

Certification                                                                                                                 ii

Dedication                                                                                                                   iii

Acknowledgment                                                                                                         iv

Abstract                                                                                                                       v

Table of Contents                                                                                                         vi

Chapter one

1.0

Background of Study—————————————————————————————

1

1.1 Statement of the Problem——————————————————————————–

3

1.2 Objectives of the Study———————————————————————————–

6

1.3

Significance of the Study———————————————————————————-

6

1.4

Scope of Delimitation of the Study———————————————————————

7

Chapter two

2.0

Exchange Rate Fluctuation in the Context of Nigeria Economy———————————–

8

2.1Introduction—————————————————————————————————-

8

6

2.2 Nigeria’s  ForeignRegimesAnd itsExchangeVolatility(1961-2011) —————————-8

2.3   Foreign Exchange Rate Volatility Export Performance and Economic Growth

12

2.4   Nigeria’s  Export——————————————————————————–Performance

16

2.5 Literature Review———————————————————————————————–

-21

2.5.1 Theoretical Literature—————————————————————————————-

-15

2.6   Alternatives——————————————————————————————————-

–29

2.7   Conceptual Issues In Exchange Rate Fluctuations——————————————————-

-32

2.8   Empirical Literature———————————————————————————————

–33

2.9 Theoretical Framework—————————————————————————————-

—40

2.9.1 Policy in the Mundell-Fleming Model——————————————————————–

–40

7

2.10  The Real Exchange Rate and Trade Balance

—41

2.11  Determinants of the Real Exchange Rate—————————————————————-

—42

2.12      Limitations of the Previous Studies————————————————————————————————————————————

—-43

Chapter Three

3.0   Research Methodology—————————————————————————————-

—-46

3.1   Analytical Framework of the Models Used—————————————————————

—–46

3.2  Data Transformation——————————————————————————————-

—–48

3.3  Model Specification———————————————————————————————

—-50

3.4   Sources of Data and Variables Used————————————————————————

—–56

3.5   Estimation Technique——————————————————————————————

——57

Chapter Four

8

4.0  Presentation and Interpretation of Research Findings

——-58

4.1     Impulse Response Function Analysis————————————————————————————————————————

——–61

4.2  Dynamic Responses to One S.D Innovation to Exchange Rate

———62

4.3  Variance Decomposition of Real Outputs Growth rates—————————————-

——–62 —————————————

Chapter Five

5.0   Summary of Findings, Recommendation and Conclusion

———65

5.1     Summary of Findings —————————————————————————————————————————————

———–65

5.2   Recommendations

———–66

5.3      Conclusion—————————————————————————————————————————————————————————————————–

————67

BIBLIOGRAPHY——————————————————————————————————–

———–69

9

APPENDIX————————————————————————————————————–

———–74

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