Search

This study examines the relationship between exchange rate fluctuations and external reserves in Nigeria, focusing on the inflation rate, interest rate, and public debt as independent variables. It aims to analyze how these factors collectively influence external reserve management, with specific objectives involving the impact of the inflation rate, the influence of interest rate, and the effects of public debt. Using a causal research design and time series data from 2001 to 2021, sourced from the Central Bank of Nigeria Statistical Bulletin, Eviews 12 facilitates analysis. using ordinary least square Method, Descriptive statistics, regression analysis, and diagnostic tests like the Breusch-Godfrey Serial Correlation LM Test and Heteroscedasticity Test provide insights into external reserves, inflation rate, interest rate, and public debt characteristics. Findings reveal a negative relationship between external reserves and the independent variables, emphasizing the roles of inflation rate, interest rate, and public debt. Regression analysis confirms statistical significance, except for public debt. The R2 value of 0.542050 suggests that 54% of external reserve changes are explained by the selected variables. Diagnostic tests confirm model reliability, holding implications for policymakers and stakeholders in understanding factors influencing external reserve management. In conclusion, the study underscores the critical importance of sound macroeconomic policies in managing Nigeria's external reserves. Negative relationships observed emphasize the need for strategic interventions. Recommendations include maintaining price stability, optimizing interest rate policies, practicing prudent debt management, diversifying funding sources, serving as a guide for policymakers to navigate economic challenges, and enhancing Nigeria's external reserves' resilience.

Africa has underdeveloped stock markets that have failed to meet the continent’s capital needs, such as rapid economic growth. This research analyzes the key drivers of stock market development in Africa from a macroeconomic perspective. The study examines several macroeconomic variables, including credit to the private sector, foreign direct investment, external reserves, money supply, external trade, per capita GDP, inflation, and lending rate to explain stock market development in Africa. The study builds a panel data consisting of eight African countries from 1994 to 2018 and applies the pooled mean group estimation technique. The analysis shows that in the long run, credit to the private sector, external reserves, and inflation are the most important factors that influence stock market development, while in the short run, income and trade openness are significant in explaining stock market development in Africa. The study recommends that policies to develop African stock markets should center on developing the private sector through access to credit, increased per capita income, and effective foreign reserve management to boost local and foreign investors’ confidence.

Economy of a country can absorb shock and as well boost confidence through external reserves. Hence, external reserves play an important role to the extent that it helps in stabilizing the country’s economy. This study focuses on modeling the Nigeria external reserves using time series technique. 30-year data were extracted from the Central Bank of Nigeria (CBN) bulletin from 1990 – 2019. Some economic tools used to diagonize the data are Augmented Dickey Fuller (ADF) test, unit root tests Kwaitkowshi – philips – Schmiot – Shin test in order to ascertain the stationary of the data. Meanwhile, Auto Regression Integrated Moving Average (ARIMA) model was used as model for prediction whereby Akaike Information Criterion (AIC) and Hannan-Quinn Information Criterion (HQIC) were used as model diagnostic checking. At original level, the data showed an upward trend and found out to be non-stationary. When further examined using the diagnostic economic tools, at first difference the data were found to maintain a state of equilibrium. Also, model diagnostic checking revealed that ARIMA (2,1,7) was found to be the appropriate optimal model and thereby used for forecast for the next five years. Hence, the forecasted values revealed that the Nigeria external reserves will continue to increase steadily. Consequently, government should put in place legal policies that will enhance, increase accumulation and proper management of external reserves.

This study investigated the connection between external reserve and economic growth in Nigeria. It covered the period of 1986 to 2018. Data were soured from Central Bank of Nigerian Statistical Bulletin (2018). The techniques adopted for analysis were Augmented Dickey-Fuller Unit Root, Philip Perron Unit Root, Autoregressive Distributed Lag (ARDL) and Granger Causality techniques. Base on Bound Co-integration test result it was found that external reserve, exchange rate, trade openness and inflation rate had long run relationship with real gross domestic product. The ARDL result indicated that external reserve and exchange rate positively influenced economic growth while trade openness and inflation rate were found to exert negative effect on economic growth. The causality result indicated that external reserve had bidirectional causality with economic growth in Nigeria. The implication of these findings is that the policy of holding and managing reserves will enhance liquidity position of a nation, serve as cushion during economic crisis, prevent exchange instability and provide long term resources for investment in infrastructural facilities which are growth inducing in the long run. [ABSTRACT FROM AUTHOR]

The paper analyses the influence of oil price volatility on Exchange Rate Variability, External Reserves, Government Expenditure and real Gross Domestic Product using the methodology of Vector Auto- Regressive (VAR) to carry out regression analysis, impulse response function and factor error variance decomposition for robust policy recommendations. The results of the research show that unstable oil price exerts varying degrees of deleterious effect on exchange rate variability, external reserves, Government expenditure and real gross domestic product (GDP). Based on the findings of the study, we recommend the need for the country to branch out its revenue sources. This will further shield the dangle effect of the fluctuation in prices of oil. Serious policy attention should be attached to agricultural reformation, industrial policy drives, mines and mineral development to diversify Nigeria's economy following the downward slide in the oscillations in oil prices to address the problem of excessive dependence on crude oil exportation. This will help to achieve sustainable growth and development in Nigeria. [ABSTRACT FROM AUTHOR]