Regional Volatility Linkages: Impact of Neighbouring Currencies on Nigeria's Currency Instability

• Authors: Abdurrauf Babalola , Kudu Ibn Muhammad

Title variants

PL

Analiza związków zmienności regionalnej: wpływ sąsiednich walut na niestabilność waluty Nigerii

Abstracts

PL

W artykule zbadano wpływ zmienności kursów walut krajów graniczących z Nigerią, tj. Republiki Beninu, Nigru, Czadu i Republiki Kamerunu, na zmienność kursu walut Nigerii, wyko- rzystując obserwacje miesięczne za okres od 1 stycznia do 31 grudnia 2021 roku. W badaniu zastosowano metodę uogólnionej autoregresyjnej heteroskedastyczności warunkowej. Przeprowa- dzone analizy wykazały, że wahania kursów walut tych krajów mają istotny wpływ na zmienność waluty naira Nigerii. W rezultacie zaleca się, aby decydenci i agencje rządowe wzmocniły bezpieczeństwo wzdłuż granic Nigerii z Kamerunem, Nigerii z Beninem, Nigerii z Czadem i Nigerii z Nigrem w celu bardziej rygorystycznej regulacji importu i wspierania stabilności waluty Nigerii. Rząd Nigerii powinien zachęcać do mniejszego importu z tych krajów poprzez produkcję substytucyjną importu i większy eksport z Nigerii, ponieważ to może prowadzić do aprecjacji nairy.

EN

This study examines the effect of the exchange rate volatility of currencies of countries bordering Nigeria, namely the Benin Republic, Niger, Chad and the Cameroon Republic on Nigeria's exchange rate volatility using monthly observations for 1st January 2001 to 31st December 2021. The study employed the Generalised Auto-Regressive Conditional Heteroscedasticity method to analyse the dataset. The study found that fluctuations in the currencies of these countries have a significant impact on the volatility of Nigeria's currency naira. As a result, it is recommended that policymakers and government agencies strengthen security along the Nigeria-Cameroon, Nigeria-Benin, Nigeria-Chad, and Nigeria-Niger borders to more strictly regulate imports and support the stability of Nigeria's currency. The Nigerian government should encourage less importation from these countries through import-substitute production and higher exportation from Nigeria as such could lead to the appreciation of the naira.

Keywords

EN

ARCH; bordering counties currency; exchange rate volatility; GARCH

PL

ARCH; waluta powiatów graniczących; zmienność kursu walutowego; GARCH

• Publisher: Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu
• Journal: Econometrics. Ekonometria. Advances in Applied Data Analytics
• Year: 2024
• Volume: 28
• Issue: 1
• Pages: 11-25

Dates

published

2024

Contributors

author

Abdurrauf Babalola

• Al-Hikmah University, Ilorin Nigeria

• https://orcid.org/0000000183896639

author

Kudu Ibn Muhammad

• Al-Hikmah University, Ilorin Nigeria

• https://orcid.org/0000000185680743

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Identifiers

DOI

10.15611/eada.2024.1.02

Biblioteka Nauki

31233543