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Performance Of Selected Currencies At Retaining The Value Of Nigerian Assets (1998 - 2014)

Author

Listed:
  • MUFUTAU AYINLA ABDUL-YAKEEN

    (Kwara State University, Malete)

  • Nasir Mukhtar GATAWA

    (Usmanu Danfodiyo University, Sokoto)

Abstract

This study obtained Exchange Rate of Nigerian Naira (ERN) to currencies of twenty-one countries selected from major economic blocs on quarterly basis between 1998 and 2014. Least Square method extracts ERN to United States Dollar (USD) as dependent variable. Comparing ERN to USD with other Foreign Exchange (FE) using Augmented Dickey-Fuller (ADF) test shows only Ghanaian Cedi (GHC) being stationary at levels while others were at first difference. Co-integration test exposes that ERN to USD has long term relationship with ERN to all FE tested. Granger causality test shows that ERN to USD caused changes in ERN to sixteen of the currencies while other currencies behaved otherwise. Conclusively, USD is the Vehicle Currency while EURO is the best currency to store Nigerian Assets for their parameters are positive and significant at 1%; co-integrated at 10%; and ERN to EUR unilaterally cause changes in ERN to USD. Nigerians are encouraged to deposit more in EURO, but convert their deposits to USD for foreign transactions. The study confirms some of the criticisms meted on the results of regression analysis of time series data but discovered that only OLS and Trend analysis can give specific answers and recommends their employment if specific answers are needed.

Suggested Citation

  • MUFUTAU AYINLA ABDUL-YAKEEN & Nasir Mukhtar GATAWA, 2014. "Performance Of Selected Currencies At Retaining The Value Of Nigerian Assets (1998 - 2014)," Proceedings of International Academic Conferences 0702715, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:0702715
    as

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    File URL: https://iises.net/proceedings/12th-international-academic-conference-prague/table-of-content/detail?cid=7&iid=11&rid=2715
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    References listed on IDEAS

    as
    1. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
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    More about this item

    Keywords

    Assets; Currencies; Hard Currency; Trade Partners; and Vehicle Currency;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General

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