Citations


Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062
USA

Conference List

The Economics and Finance Letters

March 2019, Volume 6, 1, pp 1-8

Exchange Rate and Foreign Reserves Interface: Empirical Evidence from Nigeria

Ebere Ume Kalu

,

Ogochukwu E. Ugwu

,

Victor Chijioke Ndubuaku

,

Ozioma Patricia Ifeanyi

Ebere Ume Kalu 1

Ogochukwu E. Ugwu 2

Victor Chijioke Ndubuaku 3 Ozioma Patricia Ifeanyi 3 

  1. University of Nigeria, Nsukka, Nigeria 1

  2. Enugu State University of Science and Technology, Enugu State, Nigeria 2

  3. Federal College of Agriculture, Isiagu, Ebonyi State, Nigeria 3

Pages: 1-8

DOI: 10.18488/journal.29.2019.61.1.8

Share :

Article History:

Received: 16 October, 2018
Revised: 26 November, 2018
Accepted: 24 December, 2018
Published: 22 January, 2019


Abstract:

This work was set out to measure the responsiveness of foreign reserves to exchange rate variables with a focus on the Nigerian economy. Foreign reserve was used as a dependent variable and all the exchange rate related variables used as independent variables. Time series data spanning 1996 to 2016 was used. A combined use of the Auto Regressive Distributed Lag Model (ARDL) and correlation matrix were employed. It was found that a positively significant relationship exists between real exchange rate and reserves with nominal exchange rate sharing a positive but non-significant relationship with foreign reserves. This makes a case for proper policy direction in the management of exchange rate in a manner that produces the best economic results for the Nigerian economy. The results are considered useful for economies in the shape of Nigeria for generalization and policy direction in the management of foreign reserve and its interface with exchange rate and its related factors.
Contribution/ Originality
This study contributes to the existing literature by uncoupling exchange rate into nominal and real in measuring the nexus with foreign reserves. This study uses new estimation methodology which is the ARDL approach unlike prior studies that used OLS predominantly. The paper contributes the first logical analysis by carrying out pre-test, estimation proper and diagnostic analyses. The paper's primary contribution is that it exposes the fact that a nexus exists between foreign reserves and changes in exchange rate.

Keywords:

ARDL,, Exchange rate, Foreign reserves, Diagnostic tests, Nominal exchange rate, Real exchange rate.

Video:

Reference:


Statistics:

Google Scholor ideas Microsoft Academic Search bing Google Scholor

Funding:

This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.

Acknowledgement:

All authors contributed equally to the conception and design of the study.

Related Article

( 1 ) Testing the Random Walks in Korea Stock Exchange
( 2 ) The Effects of Exchange Rate Liberalization in Kenya on French Beans Exports
( 3 ) Exchange Rate Movements, Import And Economic Growth in Nigeria (1986-2010)
( 4 ) Impact of Food Beverage Price Index and Exchange Rate Volatility on Economic Growth
( 5 ) Testing the Random Walk: The Case of Hong Kong Stock Exchange
( 6 ) Role of Foreign Investment and External Debt in Determination of Exchange Rate
( 7 ) The Impact of the Global Financial Crisis on the Debt, Liquidity, Growth, and Volume of Companies in Palestine Stock Exchange
( 8 ) Studying the Integration of Damascus Securities Exchange with Selected Stock Markets
( 9 ) The Effect of Exchange Rate Changes on Consumer Prices in Nigeria: Evidence from VECM Model
( 10 ) Dynamics of Inflation, Economic Growth, Money Supply and Exchange Rate in India: Evidence from Multivariate Analysis
( 11 ) Implications of Crude Oil Price Volatility and Parallel Exchange Rate Fluctuation on the Cost of Living in Nigeria
( 12 ) Relevance of Stakeholders Theory, Organizational Identity Theory and Social Exchange Theory to Corporate Social Responsibility and Employees Performance in the Commercial Banks in Nigeria
( 13 ) The Effects of Exchange Rate Variability on Trade Flows in Nigeria: A Cointegration Analysis
( 14 ) The Profitability of Momentum Strategies: Empirical Evidence from Damascus Securities Exchange (DSE)
( 15 ) Exchange Rate and Foreign Reserves Interface: Empirical Evidence from Nigeria
( 16 ) Impact of Exchange Rate Fluctuation on Selected Economic Sectors of the Nigerian Economy
( 17 ) The Colonialists & Indigenous Exchange Currency: Tracing the Genesis of Socioeconomic Woes in Postcolonial Nigeria
( 18 ) The Transitional Relationship between Economic Growth and Exchange Rate in Ghana: An Empirical Approach
( 19 ) Determinants of Exchange Rate in Nigeria: A Comparison of the Official and Parallel Market Rates
( 20 ) Exchange Rate Pass-through to Prices: VAR Evidence for Albania
( 21 ) Issues of Unemployment in Nigeria: Effect of Real Exchange Rate and Inflation Interaction
( 22 ) Exchange Rate Volatility, Foreign Exchange Market Intervention and Asymmetric Preferences
( 23 ) Importance of Corporate Governance Quality and Voluntary Disclosures of Corporate Governance Information in Listed Malaysian Family Controlled Businesses
( 24 ) Strategic Evaluation of Distributed Power Generation Technology: A Sustainable Approach
( 28 ) Rate of Return Would Not Increase To the Extent of Annuity Saving Discount
( 29 ) The Association Between Corporate Risk Disclosure and Firm Performance in Emerging Country – The Case of Egypt
( 30 ) A Model of Strategic Thinking: Islamic and Iranian Perspective
( 31 ) Promoting Local Acceptability of International Oil Companies (IOCS) Through Corporate Social Responsibility (CSR): The Case of Tullow Oil in Ghana
( 32 ) Challenges and Survival Strategies for Women in Small Scale Catering Business: A Case Study of Siyaso Magaba, Mbare
( 33 ) Attributes Influencing Strategic Alignment in the Service Sector: An Indonesian Banking Sector Case Study
( 35 ) The Role of Strategic Planning on the Management of Organizational Change
( 36 ) Development, Preference Change, and Inequality in an Integrated Walrasian-General-Equilibrium and Neoclassical-Growth Theory
( 37 ) Managerial Judgement Versus Financial Techniques in Strategic Investment Decisions: An Empirical Study on the Syrian Coastal Region Firms
( 38 ) Corporate Funding and Sustainability of Non- Governmental Organizations in Africa
( 42 ) Financial Deepening, Interest Rate Spread and Economic Growth: New Evidence from Sub-Sahara Africa
( 43 ) Implications of Accountants Unethical Behavior and Corporate Failures
( 45 ) Effects of Corporate Social Responsibility on Banks Financial Performance in Nigeria: A Study of United Bank of Africa
( 48 ) The Moderating Effect of Governance Mechanisms on the Relationship Between Innovation Strategy and the Performance
( 49 ) Public-Private Partnership as a Strategy for E-Governance Funding in Africa: The Gains and the Pains
( 50 ) Does Gold Price Lead or Lags Islamic Stock Market and Strategy Commodity Price? A Study from Malaysia
( 52 ) Profitability of Commercial Bank on Interest Rate Deregulation
( 54 ) Migration as a Livelihood Strategy: The Case of Internal Migration in Ghana
( 55 ) Correlation between Financial Difficulties and Financing Strategies among Market Stallholders in Batangas City
( 56 ) Africa's Human Capital Development: Is Public Finance Management an Effective Strategy?
( 58 ) Determinants of Corporate Tax Avoidance Strategies among Multinational Corporations in Malaysia
( 59 ) The Effect of Corporate Social Responsibility Disclosure on Corporate Financial Performance
( 62 ) Growing and Building: Collaboration of Urban Poverty Reduction Strategy
( 65 ) Foreign Direct Investment (FDI) and Employment: A Case of Province of Punjab, Pakistan
( 67 ) Insecurity and Foreign Direct Investment in Nigeria
( 68 ) Development of the National Economies and the Foreign Trade Relations between Ukraine and Bulgaria (In the Period 2005-2014)
( 69 ) Effect of Institutional Factors on Foreign Direct Investment in Nigeria
( 70 ) Foreign Capital Inflows and Unemployment in Nigeria: A New Evidence from ARDL-Bounds Testing Approach
( 71 ) Disaggregated Foreign Capital Inflows and Economic Growth in a Developing Economy: Empirical Evidence from Nigeria
( 73 ) Foreign Direct Investment in Zimbabwe: The Role of Uncertainty, Exports, Cost of Capital, Corruption and Market Size
( 74 ) Foreign Direct Investment - Growth Linkage in Sub-Saharan Africa: Is Governance a Mediating Factor?
( 75 ) Study on the Effect of Foreign Investment on Anhuis Industrial Structure Optimization
( 79 ) Driving Role of Institutional Investors in the Indian Stock Market in Short and Long-Run – An Empirical Study
( 80 ) Just-In-Time: Review of Empirical Studies
( 81 ) The Effect of Selected Financial Ratios on Profitability: An Empirical Analysis of Listed Firms of Cement Sector in Saudi Arabia
( 82 ) An Empirical Test on Effect of Intra-Product Trade on Regional Income Distribution: The Case of Liaoning, China
( 83 ) Causal Relationship between Imports and Economic Growth in Zimbabwe: An Empirical Analysis 1975 – 2013
( 84 ) The Internal Branding Process: Customer Reprofiling and Brand Positioning (Empirical Study on Traditional Snack Food in Bandung-Indonesia)
( 86 ) Empirical Evidence on Municipal Tax Policy and Firm Growth
( 87 ) The Effect of Public Debt on Domestic Product and Unemployment (An Empirical Study on the Palestinian Economy)
( 88 ) Does the Holiday Effect Differ from Religious to Non-Religious Holidays? Empirical Evidence from Egypt
( 89 ) What Drives Banking Stability? Empirical Evidence from ECOWAS Countries
( 91 ) An Empirical Investigation into the Key Drivers of Economic Performance in the CEMAC Zone: A Panel Corrected Standard Errors Approach
( 92 ) Forecasting Equity Index Volatility: Empirical Evidence from Japan, UK and USA Data
( 93 ) Intention to Use E-Recruitment System: Empirical Evidence from Jobseekers in the Advertising Industry in Malaysia
( 96 ) An Empirical Assessment of the Impact of Access to Credit on Farm Output: A Case Study of Sefwi-Wiawso Municipality Ghana
( 97 ) An Empirical Evaluation of Cashless Systems Implementation in Ghana
( 99 ) Incidence of Short Term Private Capital Outflow: Empirical Analysis in Nigeria
( 100 ) New Evidence on the Link Between Income Inequality and Misery Index: A Nonlinear Time Series Analysis
( 101 ) How Telecommunication Development Aids Economic Growth: Evidence from Itu Ict Development Index (IDI) Top Five Countries for African Region
( 102 ) The Impact of Human Capital on Economic Growth: Evidence from Tunisia Using Star and Stecm Models
( 103 ) The Nexus between Financial Crisis and Household Consumption: Evidence from Emerging Countries
( 104 ) Effective Tax Administration and Institutionalization of Accounting Systems in Small and Medium Scale Enterprises: Evidence from Nigeria
( 105 ) Moderating Effect of Demographics on Monetary Motivation and Employees Job Performance Relationship: Evidence from Malaysia
( 106 ) The Impact of Dividend Policy on Shareholders’ Wealth before and After Financial Melt down: Evidence from FMCG Sector in India
( 107 ) Stock Market Performance and Economic Growth: Evidence from Nigeria Employing Vector Error Correction Model Framework
( 108 ) Share Options, Share Award and Firm’s Performance: Evidence from Malaysian Public Listed Companies
( 109 ) Impact of Inflation on Per Capita Income in Emerging Economies: Evidence from BRICS Nations
( 110 ) Does Managerial Emotional Biases Affect Debt Maturity Preference? Bayesian Network Method: Evidence from Tunisia
( 113 ) Testing the PPP Using Unit Root Tests with Structural Breaks: Evidence from Politically Unstable Arab Countries
( 119 ) An Investigation of the Relationship between Manufacturing Output and Economic Growth : Evidence from Nigerias Data Set
( 120 ) Macroeconomic Indicators and Capital Formation Growth in Nigeria: A New Evidence
( 126 ) External Debt and Economic Growth: Two-Step System GMM Evidence for Sub-Saharan Africa Countries
( 127 ) Impact of Network Finance Development on Inflation: Evidence from Chinese Market
( 128 ) The Relationship between Financial Development, Economic Growth, and Inflation: Evidence from Southeast Asia
( 137 ) Climate Change Adaptation in Semi-Arid Dodoma: An Experience from Eco-Village