Assessing Exchange Rate Volatility and Economic Growth in Nigeria: A Garch Model Approach

Napoleon David Okosu
Additional contact information
Napoleon David Okosu: Department of Economics, Veritas University, Abuja FCT- Nigeria

International Journal of Research and Innovation in Social Science, 2022, vol. 6, issue 7, 152-163

Abstract: This study has examined the impact of exchange rate volatility on economic growth in Nigeria from the year 1981 to the year 2020. The study adopted secondary data (i.e. time series) obtained from World Bank National Account data and Central Bank of Nigeria Annual Statistical Bulletins, subjecting them to statistical analysis for relevant inferences to be made. Five variables were used in the study which were Growth rate of Gross Domestic Product (GRGDP), Exchange Rate Volatility (EXRV), Balance of Trade (BOT), Oil Price (OILP) and Inflation (INF) Rate. The variables were subjected to unit root test and they were stationary at different order of I(0) and I(1). Since the Variables were not all stationary at level but a mixed series, the ARDL bound test of cointegration was used to test for cointegration among them. Using the bound test, the variables were found to be cointegrated at 1% level of significance. The ARDL result indicated that; Exchange rate volatility has a significant impact on economic growth, with the impact being negative. In addition, other economic variables such as inflation has a negative and significant impact on economic growth while oil price have a positive and significant impact on economic growth. On the other hand, BOT has a positive effect on growth but the impact was significant at the 10 percent level. From the findings the study recommended that foreign exchange market should be well monitored with a view to ensuring that only ventures that would engender value added production in the real sector and export-oriented businesses should have more access. This will help to increase the value of the naira against major world currencies.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rsisinternational.org/journals/ijriss/ ... -issue-7/152-163.pdf (application/pdf)
https://www.rsisinternational.org/virtual-library/ ... arch-model-approach/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:6:y:2022:i:7:p:152-163

Access Statistics for this article

International Journal of Research and Innovation in Social Science is currently edited by Dr. Nidhi Malhan

More articles in International Journal of Research and Innovation in Social Science from International Journal of Research and Innovation in Social Science (IJRISS)
Bibliographic data for series maintained by Dr. Pawan Verma ().