Risks, Bad News, and Good News of Exchange Rate Volatility and National Elections in Nigeria: (Empirical Evidence via Threshold GARCH and GARCH-in-mean Methodologies)
Journal Title: International Journal of Academic Research in Business and Social Sciences - Year 2017, Vol 7, Issue 3
Abstract
The nature and state of the Nigerian economy could only suggest lack of proficiency in policymaking; tool of the policy makers of Nigeria. It is however a fallacy because Nigeria do not lack right policies but the execution will of these policies. Using monthly series from 1999 to 2014 via the methodologies of Threshold GARCH and GARCH-in-mean , National Elections in Nigeria do not only influence significantly the Volatility or swings in the exchange rate of Naira but depreciates Naira further. The more this Risk is absorbed in the economy, the more the naira depreciates. Good news and bad news both significantly affect the exchange rate volatility significantly while bad news influences it more by which is in line with the findings of Dr. Oduh Moses and Ms. M. S. Priscilla, using Exponential GARCH to assess effects of Good and Bad information on exchange rate volatility of Nigeria. We recommend a strict restriction of the buying and selling of foreign currencies by the financial institutions at the appropriate periods concerning election campaign and advices banking campaign fund in domestic financial institutions as the monetary authority tighten their belt on sterilizing shocks on the exchange rate volatility.
Authors and Affiliations
David Iheke Okorie, Dak-Adzaklo Cephas Simon- Peter
Keywords
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- EP ID EP604050
- DOI 10.6007/IJARBSS/v7-i3/2733
- Views 67
- Downloads 0
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