Exchange Rate Management and Sectorial Export-Financing in Nigeria

Femi-Olagundoye Mercy
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Femi-Olagundoye Mercy: Babcock Business School, Nigeria

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 8, 4332-4350

Abstract: The monetary authorities in Nigeria adopted the flexible exchange rate system to stabilise the foreign exchange rate market and enable banks to finance the real sector of the economy. The impact of exchange rate management on export financing in the form of agricultural, manufacturing, and solid mineral sector loans was analysed to ascertain if exchange rate management influences the availability of loans to exporters in the agro-sector, manufacturing, and solid mineral sectors. The study used the Augmented Dickey-Fuller (ADF) test for stationarity of the time series, the Bound Test for Co-integration to check the long-term relationship, and the Autoregressive Distributed Lag model to test the relationship among the variables. The result showed that changes in the exchange rate have a short-run negative significant impact on export loans to the three sectors and a long-run positive significant impact on the agro sector. The study recommended that policymakers introduce monetary policies that encourage investors, reduce interest and inflation rates, and stabilise exchange rates.

Date: 2024
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