ABSTRACT
Exchange rate is the price of one currency in terms of another currency. Exchange rates this exchange rate is also used
to determine the level of output growth of the country. Over the years, Nigeria has adopted various exchange rate regime ranging
research work is centered on the
impact of exchange rate
on
the Nigeria economic growth with special emphasis on the
purchasing power
of
the average Nigeria and
the
level of
international trade transaction.
To do this,
the classical linear regression model is applied and the ordinary
least square econometric technique is
also used to estimate the impact of exchange rate on economic growth. The
variables
used are GDP and
non-oil
export as the dependent
variables, real
exchange rates interest rates,
inflation rate and degree of
trade openness as the independent variables.
CHAPTER ONE
1.0 INTRODUCTION
1.1
BACKGROUND TO THE STUDY
A
country foreign exchange policy is derived from the perceives overall economic
objectives to achieve and the expected direction of growth (CBN, 2003).
Consequently, non conflicting sectoral
policies are conceived within the ambit of the overall policy framework such
that each sectoral policy reinforces each other.
A simplest definition has it that
exchange rate is the price of one currency in terms of another. Thus, it
measures the worth of a domestic economy in terms of another economics (Obeski,
1998).
Exchange rates regularly quoted
between all major currencies mostly that of the trading partners, but
frequently one important currency (that is the dollar) is used as a standard in
which to express and compare all rates.
It is one of the key tools in economic
management and in the stabilization and adjusts policies in developing
countries. Exchange rates policies play a vital role in determine the position
of a country in terms of international competition.
In autonomous markets, the exchange
rate was seen to be volatile, and depreciated at will. This exerted pressure on
the official foreign exchange market, and made the monetary policy target of
the period to continually unrealistic due to the inflationary financing of
government deficit with the deregulation of the economy; a market-based
framework for the determination of exchange rate was adopted. It was envisaged
that the realization of macroeconomic stability would lead to the elimination
of distortions in the external sector and this enhance growths, stimulate non
oil exports, increase foreign exchange inflows, moderate demand pressure in the
foreign exchange market and generally improve foreign exchange to eliminate the
parallel market premium capital flight and also enhance the inflow of foreign
investigation (CBN: 2003).
From the forgoing it becomes clear
that the concept of exchange rate policies has the impact so as to show in the
one of the macroeconomic variables, it contribute to economic growth of
Nigeria. It is therefore necessary that a research work be carried out to this
effect so as to provide suggestion that will served as a guide towards the
actualization of macroeconomic objectives that will bring about the level of
targeted economic growth in Nigeria.
1.2 STATEMENT OF THE PROBLEM
1.
Should the range be decided in advance?
1.3
RESEARCH QUESTION
1. What is
the impact of exchange rate on Nigeria’s economic growth?
1.4
OBJECTIVES OF THE STUDY
The objectives of the
study are to determine the impact of exchange rate on the growth of the
country.
1. To estimate the
impact o exchange rate on Nigeria’s economic growth
1.5
RESEARCH HYPOTHESIS
Based on
the objectives
of the study, the following hypothesis were
formulated.
1.
HO: exchange rate has no significant impact on Nigeria’s economic
growth
1.6
SCOPE
OF THE
STUDY
This research work is
designed to cover the
period
1980-2010, a period of thirty one years. The general overview of the profile of Nigerians exchange rate
over the years shall be
discussed. The scope consist of
the regulatory and
deregulatory
exchange rate period that is the fixed exchange rate and the floating
exchange rate period. The
study
is based on core macro-economic performance of Nigeria between 1980-2015.
1.7 SIGNIFICANCE OF
THE STUDY
The significance of this study lies on the
recommendations made at the end of the following:
1.
Importer who make payment in foreign
currencies.
2.
Policy makers of the central bank of
Nigeria who issues the guideline government international trade practice.
3.
Bank-especially the commercial banks and
merchant banks.
4.
The general public who has a right
contribute and be informed of the activities our banking institutions.
5.
It is hoped that findings and
recommendations of this study will adequately benefit the various interest
groups named above.
1.8
LIMITATIONS OF THE
STUDY
During
the course of this research the researcher experience a number limitation
constrains.
The researcher was faced with already
known problem of gathering material from the Nigeria organization. Almost every
information is classified and therefore most of the companies and banks
approached were weary of releasing financial information related to the topic.
Gathering
of information from public organization such as federal ministry of finance,
federal of statistics and central bank of Nigeria was also difficult. ================================================================
Item Type: Project Material | Attribute: 62 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
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