Impact of Exchange Rate Deregulation on manufacturing Sector Performance in Nigeria
No Thumbnail Available
Date
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Description
The study examined the impact of exchange rate
deregulation on manufacturing output performance in
Nigeria over the period 1980 to 2016. The normalized cointegration
technique was used to test for long-run
relationship between exchange rate and manufacturing
output while the granger causality test was used to ascertain
the direction of causality between them. Also, the error
correction mechanism (ECM) was used to calculate the
speed of adjustment of the model to short-run disequilibrium
condition. The empirical findings revealed that exchange
rate has non-significant positive long-run effect on
manufacturing industry output. However, unidirectional
causal impact of exchange rate on manufacturing output was
established using the pairwise granger causality test. Based
on the above result, it is recommended that in discharging
the mandate of exchange rate management, the monetary
authorities should aim at stabilizing exchange rate through
the use of appropriate monetary policy tools as well as
support export diversification programmes in order to
enhance foreign exchange inflow
Keywords
HB Economic Theory, HG Finance