An Empirical Investigation of The Exchange Rate Pass-Through To Domestic Prices in Nigeria “Exchange Rate Pass-Through To Domestic Prices”
Journal Title: Archives of Business Research - Year 2017, Vol 5, Issue 12
Abstract
The sensitivity of prices to fluctuations in the nominal exchange rate of the Nigeria’s currency has become a prominent subject for business and policy makers. The persistent depreciation in exchange rate and high domestic prices currently above the policy target is the basis of this study. The study adopted secondary data of monthly frequency covering January-2000 to June-2017, to test the exchange rate pass-through to domestic prices in Nigeria while controlling for effects of other variables such as monetary aggregates and fuel prices. Impulse response functions and variance decomposition under the purview of Vector Auto-regressive (VAR) modelling approach are employed for the analyses. It finds that the exchange rate pass-through to domestic prices is complete six months after exchange rate shock. However money supply and fuel price effect are stronger than the exchange rate effect although the fuel price impact decay over time. Given the stronger impact of money supply on prices, the study concludes that inflation is a monetary phenomenon thereby giving credence to the current policy anchor on money supply as a policy tool to control inflation. It therefore recommends that policy makers should continue to pursue and maintain exchange rate stance that eases the depreciation pressure.
Authors and Affiliations
Faith Arekpetan Iyoha
Value, Growth and Divergence of Opinion in Emerging Markets: Chinese Evidence
The issue of whether value stocks outperform growth stocks as predicted by the Fama and French three-factor model is of continuing interest and debate. In this paper, we examine (a) whether value stocks outperform growth...
A Diletto and his Storytellig Strategy
The strategy of involving consumers and prospects through tales or stories in advertising, known as storytelling, has been widely used by organizations and well accepted by the general public. One of the companies that b...
Dividend Policy and Share Price Fluctuations of Sampled Quoted Nigerian Companies
This focus of the study was to find out the impact of dividend policy on market price of shares on sampled quoted companies in Nigeria. Secondary data were sourced from the audited annual reports of ten selected companie...
The impact of economic crisis on holidays of young people
Purpose - This work was carried out to investigate the effects of the economic crisis in leisure travel and holidays for young people in Central Macedonia. Methodology - Semistructured questionnaire was used, combining c...
Mining “What they talk about” for a Private Healthcare Service Provider
In every industry, customer feedback contains opinions with different types of sentiment on services and products provided by companies that they purchased from. Feedback from customers help business operators to underst...