Exchange Rate Regimes and Short-Term Volatility of the Real Effective Exchange Rate in Nigeria: A Comparative Analysis
No Thumbnail Available
Date
2016
Authors
Odior, E.S.O.
Journal Title
Journal ISSN
Volume Title
Publisher
JOURNAL OF SOCIAL AND MANAGEMENT SCIENCES
Abstract
Using a time series data of the variables over the period 1970 to 2014, this paper seeks to analyse the relationship between exchange rate regimes and short-term volatility of the effective real exchange rate in Nigeria. Methodologically, this study models a standard real effective exchange rate function and employed the use of ADF - Fisher Chi-square test statistic to test for the unit root, and using the Generalized Linear Model (GLM) method to make a comparative study of the fixed and floating exchange rate regime periods in Nigeria. The results show that thedomestic currency faced real depreciation during the flexible exchange rate regime than the fixed exchange rate regime.This study has shown that exchange market pressures are significant in explaining the stochastic trend in real effective exchange rate in Nigeria.The study recommends and concludes that developing countries like Nigeria should consider an open guided exchange rate system in order to minimize the extent of real effective exchange rate volatility.
Description
Keywords
Exchange Rate Regimes , Real Effective Exchange Rate , Comparative Analysis
Citation
Odior, E. S (2016), Exchange Rate Regimes and Short-Term Volatility of the Real Effective Exchange Rate in Nigeria: A Comparative Analysis; Journal of Social and Management Sciences, Faculty of The Social Sciences, Delta State University, Abraka, Vol. 11, No. 1, Pp, 1 – 11