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Implications of Exchange Rate Fluctuation and Economic Performance: The Nigerian Experience

Samuel Lucky Penu and Lilian Okorite Nkanbia-Davies
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Samuel Lucky Penu: Department of Finance and Banking, Faculty of Management Sciences, University of Port Harcourt, Port Harcourt, Nigeria
Lilian Okorite Nkanbia-Davies: Department of Accounting, Faculty of Management Sciences, University of Port Harcourt, Port Harcourt, Nigeria

International Journal of Economics and Financial Research, 2017, vol. 3, issue 10, 206-217

Abstract: The study gauged the influence of exchange rate fluctuations on the Performance of the Nigerian Economy over the time from of 1986 to 2016, utilizing secondary data tracked from the statistical report of the Apex Nigerian bank, and utilizing techniques such as Unit root test, Generalized autoregressive conditional heteroscedasticity (GARCH), Impulse-Response Output and Variance-Decomposition Test to evaluate variables such as Interest rate, inflation rate, exchange rate against a sole indicator of Economic Performance I.e. Gross Domestic Product Growth rate (GDPGR), it was discovered that despite the short run influx of the spill over volatility of Interest rate and inflation rate, there exist no long run volatility influence of interest rate on Economic Performance in Nigeria. It was therefore recommended that the apex financial institution and relevant policy makers should ensure an interest rate system and status that could stimulate growth or production and the nation should endeavour to utilize her interest rate in controlling its output level as it motivates Economic Performance (GDPGR).

Keywords: Interest rate; Volatility; Shocks; Inflation rate; exchange Rate; Gross Domestic Product Growth Rate. (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:arp:ijefrr:2017:p:206-217