Open AccessTHE IMPACT OF EXCHANGE RATE VOLATILITY ON ECONOMIC GROWTH IN NIGERIA: A DYNAMIC ECONOMETRIC APPROACH
Author(s) -
Comfort Akinwolere Bukola
Publication year - 2021
Publication title -
african journal of business and economic development
Language(s) - English
Resource type - Journals
ISSN - 2782-7658
DOI - 10.46654/ajbed.1533
Subject(s) - economics , exchange rate , volatility (finance) , balance of payments , currency , monetary economics , macroeconomics , econometrics
This study examined the impact of exchange rate volatility on economic growth in Nigeria. The study covers the period of 1986 to 2019. Using time series data, the methodology adopted is the Vector Error Correction Mechanism to explore the impact of exchange rate volatility on the selected macroeconomic variables. The result indicated that exchange rate volatility has a significant impact on economic growth, specifically it has a positive impact on inflation, unemployment and balance of trade. On the other hand it has a negative impact on economic growth and investment. The recommendations made include; that relevant authorities should try to avoid systematic currency devaluations in order to maintain exchange rate volatility at a rate that allows adjustment of the balance of payments.