Open Access Original Research Article

Implication of Monetary Policy Rate and Interest Rate on Exchange Rate in Nigeria: 1981-2017

Nnamani, Vincent, Anyanwaokoro, Mike

South Asian Journal of Social Studies and Economics, Page 1-11
DOI: 10.9734/sajsse/2019/v4i130115

The study investigated the implication of monetary policy rate on the exchange rate and interest rate in Nigeria, 1981-2017. Because of the above-stated problems, the specific objectives are to: Investigate the effect of monetary policy rate on the exchange rate in Nigeria, determine the effect of the monetary policy rate on interest rate in Nigeria. The analysis of error correction and autoregressive lags fully covers both long-run and short-run relationships of the variable under study. The statistical tool of analysis employed in the study is Autoregressive Distributed Lags (ARDL) and Philips Peron method of stationary testing and structural breakpoint unit root test., these methods were employed to check the stationarity and breakpoint analysis of the time series data employed in this study. The study observed that monetary policy rate has a positive and significant effect on the exchange rate in Nigeria. It was also observed that the monetary policy rate has a positive and significant effect on the interest rate in Nigeria. Overall, our results indicated that the impact of monetary policy on the exchange rate was significant. There was a positive and significant relationship between monetary policy variables and exchange rate. The conclusion that is drawn from our results is that monetary policy remains an effective and potent tool for ensuring a stable exchange rate in Nigeria. The study recommended that monetary policy should be used to create a favourable investment environment by facilitating the emergence of market-based interest rate and exchange rate regimes which could attract domestic and foreign investments. Second; the Central bank of Nigeria (CBN) need to avoid ordination and balance between monetary and fiscal policies to ensure the smooth realization of monetary policy goals. Policy inconsistency or summersault to determine its policy impact before contemplating a change. Finally, there should be a coo.

Open Access Original Research Article

Impact of Oil Price Changes on Selected Macroeconomic Variables in Nigeria

Harbor Florence Ifeyinwa, Oleka Dorathy Chioma

South Asian Journal of Social Studies and Economics, Page 1-10
DOI: 10.9734/sajsse/2019/v4i130116

In this study, the impact of oil price changes on selected variables in Nigeria within the period, 1981-2016 had been evaluated. Adopting the ex-post facto research design with annual time series and using The Autoregressive Distributed Lag (ARDL) model; the results revealed that the change in oil price had a positive and significant impact on government revenue and government expenditure, but had no positive and significant impact on the domestic price level.  It is therefore recommended that the monocultural economy should be omitted through well-planned and implementation diversification.

Open Access Original Research Article

Interest Rate Management and the Nigerian Economy (1986 — 2018)

Kalu, Uko Kalu, Anyanwaokoro Mike

South Asian Journal of Social Studies and Economics, Page 1-15
DOI: 10.9734/sajsse/2019/v4i130117

This study sought to examine the impact of interest rate on the Nigeria’s economy during the pre and post Regulation periods (1986 – 2013). It also investigated the joint influence of Inflation, Investment, Exchange Rate, Money Supply and Monetary Policy Rate individually on the Gross domestic Product which was used a proxy for output as well as the causality between all the factors combined and gross domestic product. Ex post facto method was adopted In order to test the hypothesis, the researcher adopted Augmented Dickey Fuller, ARDL, Bound Test and Error Correction Model. The result showed that no significant relationship exists between Gross Domestic Product and Investment, Exchange Rate and Money Supply while still affirming that a significant relationship exist between Gross Domestic Product, Monetary Policy Rate and inflation. The eye of the authorities should be on Inflation at all times, Prudent management of our Oil earnings, adequate savings (Foreign Reserve) and investments as these will help stabilize the fluctuating exchange rate  with its consequent influence on interest rate and economic growth.

Open Access Original Research Article

Direct and Reverse Causation of External Debt, Foreign Investment and Economic Growth in Nigeria, 1980-2017

Nwachukwu Ngozi Patricia, Willy Ugwuanyi

South Asian Journal of Social Studies and Economics, Page 1-12
DOI: 10.9734/sajsse/2019/v4i130118

This study examined the direct and reverse relationship among external debt, foreign investment and economic growth in Nigeria, 1980-2017. The study is ex-post facto in design and adopted the autoregressive distributed lag (ARDL) model, Granger causality test, bound co-integration test and error correction representations. It was found that external debt and exchange rate were significant functions of Real Gross Domestic Product. Foreign Direct Investment and its lag were insignificant functions of real gross domestic product. The bound test following the ARDL framework, showed evidence in favor of co-integration among the variables regardless their stationarity properties. The rightly signed error correction term of 30.4% gives an indication that it takes about 3.28 years to restore the long-run equilibrium state on the real gross domestic product should there be any shock from the explanatory variables. It is therefore recommended among others that government should create an enabling environment that will attract foreign investment given the catalytic role it plays on economic growth in Nigeria.

Open Access Original Research Article

Electronic Payment System and Financial Deepening in Nigeria, 2009-2017

Edoka Praise Rueben, Anyanwaokoro, Mike

South Asian Journal of Social Studies and Economics, Page 1-14
DOI: 10.9734/sajsse/2019/v4i130119

This study sought to evaluate the impact of the electronic payment system on financial deepening indicators in Nigeria with particular focus on the popular Automated Teller Machine (ATM). The study adopted the ex-post factor research design and the granger causality tests, correlation analyses combined with other preliminary tests were used. Quarterly time series data for a 6-year-period 2009-2017, collected from the central bank of Nigeria statistical bulletins were used. Ratios of Broad money supply to Gross Domestic Product (M2GDP) and ratio of credit to the private sector to gross domestic product (CPSGDP) were used as the dependent variable and proxies for financial deepening, while the independent variables included volume of automated teller machine transactions, web payment, mobile payment and point of sales respectively. The research findings there exists a bi-directional relationship between automated teller machine transaction (LATM) and private sector credit (LCPSGDP) in Nigeria. Also, a unidirectional relationship between automated teller machine transaction (LATM) and broad money supply (LM2GDP) in Nigeria. The results recorded from the study agree with existing findings and theories and they all agree that there is a relationship between financial deepening and electronic payment channels in the Nigeria. It is therefore recommended that the government should make policies that will improve the use of diverse electronic channels with the aim of strengthening their impact on the degree of financial depth in Nigeria. Additionally, Adequate regulatory architecture should be put in place to ensure that the negative fallouts of the use of electronic payment channels are minimized. This is with the view to making them more acceptable to the people.