<abstract xmlns="http://www.w3.org/1999/xhtml"><p>One of the contending issues in Nigeria in the recent time is external debt and exchange rate fluctuations. In view of the above, this study examined the relationship between external debt and exchange rate fluctuations in Nigeria over the period of 1981 to 2018. Consequently, the study employed Autoregressive Distribution Lag Model to address the objective of the study. The major findings that originated in this paper are as follows: external debt, debt service payment and foreign reserve have a significant positive impact on exchange rate fluctuations in the short run in Nigeria. Furthermore, based on these findings, recommendations are made for the policy makers that external debt as a means of financing budget deficit should be minimized if not totally discouraged in Nigeria because its servicing in particular and repayment put pressure on foreign exchange market in the short run and thereby leads to exchange rate fluctuations in terms of depreciation of naira in the country. Also, country’s foreign reserve should be strengthened through the implementation of aggressive export promotion policy in Nigeria.</p></abstract>

One of the contending issues in Nigeria in the recent time is external debt and exchange rate fluctuations. In view of the above, this study examined the relationship between external debt and exchange rate fluctuations in Nigeria over the period of 1981 to 2018. Consequently, the study employed Autoregressive Distribution Lag Model to address the objective of the study. The major findings that originated in this paper are as follows: external debt, debt service payment and foreign reserve have a significant positive impact on exchange rate fluctuations in the short run in Nigeria. Furthermore, based on these findings, recommendations are made for the policy makers that external debt as a means of financing budget deficit should be minimized if not totally discouraged in Nigeria because its servicing in particular and repayment put pressure on foreign exchange market in the short run and thereby leads to exchange rate fluctuations in terms of depreciation of naira in the country. Also, country’s foreign reserve should be strengthened through the implementation of aggressive export promotion policy in Nigeria.

Investigating External Debt and Exchange Rate Fluctuations in Nigeria: Any Difference with ARDL Model?

Studia Universitatis Babes-Bolyai Oeconomica

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

One of the contending issues in Nigeria in the recent time is external debt and exchange rate fluctuations. In view of the above, this study examined the...

Investigating External Debt and Exchange Rate Fluctuations in Nigeria: Any Difference with ARDL Model?

Pubblicato online: 31 dic 2020

Pagine: 53 - 64

DOI: https://doi.org/10.2478/subboec-2020-0015

Parole chiave
Exchange Rate, Fluctuations, External Debt, ARDL, Nigeria

© 2020 Timothy Ayomitunde Aderemi et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Investigating External Debt and Exchange Rate Fluctuations in Nigeria: Any Difference with ARDL Model?

Pubblicato online: 31 dic 2020

Pagine: 53 - 64

DOI: https://doi.org/10.2478/subboec-2020-0015

Parole chiaveExchange Rate, Fluctuations, External Debt, ARDL, Nigeria

© 2020 Timothy Ayomitunde Aderemi et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Parole chiave
Exchange Rate, Fluctuations, External Debt, ARDL, Nigeria