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Exchange Rate Stability And Export Performance: The Case Study Of Agricultural Produce In Nigeria, (1978-2010)
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According to economic indicators, the monetary Approach of Exchange rate
determination confirmed exchange rate as a function of relative shifts
in money, inflation rate or its proxy and domestic output between an
economy and the trading partner. More so, the exchange rate of any
counting is determined by the number of factors which include the state
of the economy, the competitiveness and the volume of export, the level
of domestic production of foreign reserve which is the nation worth,
because of its role as the determinant of the relative price of tradable
to non-tradable, it is a major instrument affecting the structural
change in an economy.
Exchange rate policies in Nigeria as in other
countries are often sensitive and controversial mainly because the kind
of structural transformation required such as reducing imports or
expanding agricultural exports, invariably imply a depreciation of the
nominal exchange rate.
In the quest for stability of exchange rate, the Nigeria Monetary authorities tried several bidding system, including the Dutch
Auction
system (DAS) and the Marginal Rate System. An attempt to ensure
viability in the market led to many amendments of the rules,
intervention by Central Bank of Nigeria (CBN), and opening of different
exchange windows for operation during this period. Despite all these
fluctuations, rate of exchange
continued to be an issue of concern to
the authorities. This is as a result of causes of changes in the
exchange rate which are as follows;
ï‚· Changes in prices
ï‚· Capital flows
ï‚· Changes in exports and imports
ï‚· Political conditions
ï‚· Influence of Banks
This
formed the basis of this study “Exchange Rate Stability and Export
performance. The case of Agricultural produce in Nigeria, (1978-2010)â€.
1.2 STATEMENT OF THE PROBLEM
in
the most developing country in general and Nigeria in particular, some
of the economic tools used for both planning and implementation of the
economic programme are normally based on educated guesses or on models
which have been designed for other countries. The direction of this work
will be to understand the cardinal reasons for the inability of Nigeria
to maintain a favourable external reserve.
What factors capture most
the exchange rate instability on export performance in Nigeria? This
will show succinctly the conformity of exchange rate in Nigeria to a
priori economic expectations.
Economic theory informs that decision
to exchange rates depend demand and supply of foreign exchange, that is
change in income earnings of export crop producers which come as a
result of either increase or decrease in International World price of
exports or devaluation of currency and subsequent prices. Such exchange
rate change may lead to a major decision in the future output if they
are unpredictable and erratic.
How true these economic assertions in Nigeria exchange rate profile are becomes the question.
1.3 OBJECTIVE OF THE STUDY
the
overall objective of this study is to determine empirically the dynamic
effect of exchange rate stability and export performance of
agricultural produce in Nigeria from (1978-2010).
The trust of the research will be to
ï‚· Evaluate the nature and extent of the impact of exchange rate stability on agricultural exports in Nigeria.
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ABSRACT - [ Total Page(s): 1 ]Exchange rate is the price of one currency in terms of another currency. Exchange rate stability has to do with government actions in order to stabilize exchange rate so as to increase export in Nigeria especially export of primary products (agricultural produce) over the years, Nigeria has adopted various exchange rate regimes ranging from fixed exchange regime to floating exchange regime. The main purpose of this work is to determine to what extend does the volatility and risks of exchange rat ... Continue reading---
