The real exchange rate of an oil exporting economy: Empirical evidence from Nigeria
In this study the long-run relationship between real oil price, real effective exchange rate and productivity differentials is examined using annual data for Nigeria over the period 1980 to 2010. We aim to investigate whether oil price fluctuations and productivity differentials affect the real effective exchange rate. The empirical results suggest that whereas real oil price exercise a significant positive effect on the real exchange rate in the long run. Productivity differentials exercise a significant negative influence on the real exchange rate. The study noted that, the real exchange rate appreciation of 2000-2010 was driven by oil prices. The findings of this study have important implications for exchange rate policy and are relevant to many developing economies where oil exports constitute a significant share of their exports.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| |
|Order Information:|| Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simeon Coleman & Juan Carlos Cuestas & Estefanía Mourelle, 2011. "Investigating the oil price-exchange rate nexus: Evidence from Africa," Working Papers 2011015, The University of Sheffield, Department of Economics, revised May 2011.
- Lizardo, Radhamés A. & Mollick, André V., 2010. "Oil price fluctuations and U.S. dollar exchange rates," Energy Economics, Elsevier, vol. 32(2), pages 399-408, March.
- Virginie Coudert & Cécile Couharde & Valérie Mignon, 2011.
"Does Euro or Dollar Pegging Impact the Real Exchange Rate? The Case of Oil and Commodity Currencies,"
The World Economy,
Wiley Blackwell, vol. 34(9), pages 1557-1592, 09.
- Virginie Coudert & Cécile Couharde & Valérie Mignon, 2008. "Do Terms of Trade Drive Real Exchange Rates? Comparing Oil and Commodity Currencies," Working Papers 2008-32, CEPII research center.
- Robert A. Amano & Simon van Norden, 1995.
"Exchange Rates and Oil Prices,"
- Cashin, Paul & Cespedes, Luis F. & Sahay, Ratna, 2004.
"Commodity currencies and the real exchange rate,"
Journal of Development Economics,
Elsevier, vol. 75(1), pages 239-268, October.
- Kuralbayeva, Karlygash & Kutan, Ali M. & Wyzan, Michael L., 2001. "Is Kazakhstan vulnerable to the Dutch disease?," ZEI Working Papers B 29-2001, ZEI - Center for European Integration Studies, University of Bonn.
- Q. Farooq Akram, 2004. "Oil prices and exchange rates: Norwegian evidence," Econometrics Journal, Royal Economic Society, vol. 7(2), pages 476-504, December.
- Qaisar Farooq Akram, 2000.
"PPP Despite Real Shocks: An Empirical Analysis of the Norwegian Real Exchange Rate,"
Economics Series Working Papers
30, University of Oxford, Department of Economics.
- Akram, Q.F., 2000. "PPP Despite Real Shocks: an Empirical Analysis of the Norwegian Real Exchange Rate," Economics Series Working Papers 9930, University of Oxford, Department of Economics.
- Tsen, Wong Hock, 2011. "The real exchange rate determination: An empirical investigation," International Review of Economics & Finance, Elsevier, vol. 20(4), pages 800-811, October.
- Chaudhuri, Kausik & Daniel, Betty C., 1998. "Long-run equilibrium real exchange rates and oil prices," Economics Letters, Elsevier, vol. 58(2), pages 231-238, February.
- Shuang Ding & Omar Al Shehabi, 2008. "Estimating Equilibrium Exchange Rates for Armenia and Georgia," IMF Working Papers 08/110, International Monetary Fund.
- Joannes Mongardini, 1998. "Estimating Egypt's Equilibrium Real Exchange Rate," IMF Working Papers 98/5, International Monetary Fund.
- Clements, Kenneth & Lan, Yihui & Roberts, John, 2008.
"Exchange-rate economics for the resources sector,"
Elsevier, vol. 33(2), pages 102-117, June.
- Sossounov, Kirill & Ushakov, Nikolay, 2009. "Determination of the real exchange rate of rouble and assessment of long-rum policy of real exchange rate targeting," MPRA Paper 18549, University Library of Munich, Germany.
- Salehi-Isfahani, Djavad, 1989. "Oil Exports, Real Exchange Rate Appreciation, and Demand for Imports in Nigeria," Economic Development and Cultural Change, University of Chicago Press, vol. 37(3), pages 495-512, April.
- Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
- Mohsin S. Khan & Ehsan U. Choudhri, 2004.
"Real Exchange Rates in Developing Countries; Are Balassa-Samuelson Effects Present?,"
IMF Working Papers
04/188, International Monetary Fund.
- Ehsan U. Choudhri & Mohsin S. Khan, 2005. "Real Exchange Rates in Developing Countries: Are Balassa-Samuelson Effects Present?," IMF Staff Papers, Palgrave Macmillan, vol. 52(3), pages 2.
- Iikka Korhonen & Tuuli Juurikkala, 2009. "Equilibrium exchange rates in oil-exporting countries," Journal of Economics and Finance, Springer, vol. 33(1), pages 71-79, January.
- Katerina Kalcheva & Nienke Oomes, 2007.
"Diagnosing Dutch Disease; Does Russia Have the Symptoms?,"
IMF Working Papers
07/102, International Monetary Fund.
- Oomes , Nienke & Kalcheva, Katerina, 2007. "Diagnosing Dutch disease: Does Russia have the symptoms?," BOFIT Discussion Papers 7/2007, Bank of Finland, Institute for Economies in Transition.
- Amano, Robert A. & van Norden, Simon, 1995. "Terms of trade and real exchange rates: the Canadian evidence," Journal of International Money and Finance, Elsevier, vol. 14(1), pages 83-104, February.
When requesting a correction, please mention this item's handle: RePEc:wsr:wpaper:y:2011:i:072. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.