Modelling exchange rate management and export loans in Nigeria: Using the Autoregressive Distributed Lag Approach


Mercy Femi-Olagundoye, Samuel.O. Dada, O.I. Wale-Awe.

DOI 10.5110/77. 1112               Page:   109-126           Vol: 19    Issue: 02   Year: 2024

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Nigeria’s trade imbalance is a result of its demand for foreign exchange regularly over the supply, hence the frequent depreciation of the value of Naira. Taking exchange rate, interest rate, inflation rate, foreign direct investment, and foreign portfolio investment as the independent variables and export loans as the dependent variable, this study, which covered a period of 23 years (2000 – 2022), models the management of exchange rate and export loans in Nigeria. The study used the Augmented Dickey-Fuller (ADF) test for stationarity of the time series, the Bound Test for Co-integration to check the long-term relationship, and the Autoregressive Distributed Lag model to assess the relationship among the variables. The results showed that exchange rate, inflation rate, interest rate, foreign direct investment and foreign portfolio investment jointly and significantly influenced export loans. Consequently, the study recommended that the monetary authorities modify the current process of selling foreign capital inflows in the Nigerian Autonomous Foreign Exchange Market by allowing the fund to be sold to the Central Bank of Nigeria and guaranteeing the provision of fund at the time of repatriation and that the government maintains a stable and competitive exchange rate.


Exchange Rate, Export Loans, Inflation Rate, Interest Rate

Received: 27 January 2024

Accepted: 12 February 2024

Published: 19 February 2024