Monetary Policy and Trade Balance in Nigeria
Journal Title: International Journal of Trend in Scientific Research and Development - Year 2021, Vol 5, Issue 5
Abstract
Nigeria apex bank Central Bank of Nigeria CBN has continued to battle with the job of reviving the ailing economy and putting it on the path of growth. The economy has witnessed unprecedented job loss, rising poverty level, accelerating inflation, sluggish economic growth and disequilibrium in the balance of trade. The study therefore examine the effect of monetary policy on trade balance in Nigeria. Specifically the study ascertained the extent to which inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria using an econometric regression model of the Ordinary Least Square OLS . From the result of the OLS, it is observed that monetary policy rate, demand deposit, liquidity ratio and exchange rate have a significant positive impact on foreign trade in Nigeria. This means that increases in monetary policy rate, demand deposit, liquidity ratio and exchange rate, will lead to increase in foreign trade in Nigeria. On the other, inflation rate and interest rate has a significant negative impact on foreign trade in Nigeria, meaning that as inflation rate and interest rate increases, will be bring about a decline in foreign trade in Nigeria. Based on the findings of this study, the study recommends that the government should employ a contractionary monetary policy to fight inflation by reducing the money supply in the country through decreased bond price. inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria. The government should intervene in the foreign exchange market in order to build reserves for themselves or provide them to the bank to help stabilize the exchange rate. The government should strive to improve trade performance in the short and long run. They should also reduce government spending and tax capital inflow. Edokobi, Tonna David | Okpala, Ngozi Eugenia | Okoye, Nonso John "Monetary Policy and Trade Balance in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd45080.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/45080/monetary-policy-and-trade-balance-in-nigeria/edokobi-tonna-david
Authors and Affiliations
Edokobi, Tonna David | Okpala, Ngozi Eugenia | Okoye, Nonso John
Keywords
Related Articles
- EP ID EP699729
- DOI -
- Views 107
- Downloads 0
Effect of Compensation and Work Motivation on Employee Performance in the Pt. Pos Indonesia Persero Medan
Compensation is all income in the form of money, direct or indirect goods received by employees in return for services provided to the company. Work Motivation is a skill in directing employees and organizations to want...
Green Computing Emerging Issues in IT
Green Computing is a way of study of ending reutilizing and rebuilding of computers and electronic devices is overall analysis. The goal of green computing is to reduce the dangerous material increasing the utilization o...
Simulation Based Interpretation and Recent Trends on Performance Analysis on Automobile Radiator through Nano Particle Fluids
The heat transfer system is of great importance in many commercial and domestic applications. Likewise, IC engine always maintained at the working temperature for good ex. The improper generation distribution of temperat...
Technical Data Management from the Perspective of Identification and Traceability in the Manufacturing Industry
In a Manufacturing Industry, be it of any scale, the entity of utmost importance is the technical data. As the quantum of the generation of such necessary data is large, it paves the way to the need of establishing a dat...
Review of Deep Neural Network Detectors in SM MIMO System
A deep neural network detector for SM MIMO has been proposed. Its detection principle is deep learning. For this a neural network must be trained first, and then used for detection purpose. It doesn’t need any channel...