THE IMPACT OF MONETARY AND FISCAL POLICIES ON THE NAIRA EXCHAGE RATE BEWTEEN 1990 AND 2009
Journal Title: Asian Economic and Financial Review - Year 2013, Vol 3, Issue 9
Abstract
This study examines the effect of Monetary and Fiscal Policies on the Naira exchange rate between 1990 and 2009. This is because in recent times, there have been series of debate on the appropriate exchange rate for the Naira and the parameters for determining its exchange rate. What is more, the exchange rate has been declining steadily and the impact of the depreciation ranges from high cost of input into manufacturing process that results in high prices of finished goods. For the purpose of empirical analysis. Naira exchange rate was selected as the dependent variable while the Money Supply (MS), Foreign Exchange Rate (FOREX), Government Expenditure (Govt Exp), Gross Domestic Product (GDP) and Inflation Rate (INFC) were identified as the independent variables. The multiple regression analysis showed that each of the independent variables impacted either positively (+) or negative (-) when measured against the exchange rate and there was a high correlation co-efficient of 0.80 between the dependent and the identified independent variables. In view of the findings, it was recommended that government should proffer an enabling environment/or a good policy mix of instruments and the method of changing policies before the result of the first ones are realized should be discouraged.
Authors and Affiliations
Musa Success Jibrin| Department of Accounting Internationa University, Bamenda, Ifurueze S. Meshack| Department of Accountancy Anambra State University, Igbariam Campus, Success Blessing Ejura| Department of Banking and Finance Kogi State University, Anyigba
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