AN EMPIRICAL ANALYSIS OF THE DETERMINANTS OF EXCHANGE RATE IN NIGERIA (1983-2007)

ABSTRACT This research work is on the empirical analysis of the determinants of exchange rate in Nigeria. (1983-2007). The main objectives of carrying  out this research is to find out the profile that exists between inflation, consumer price index and exchange rate determinant  in Nigeria. To do this successfully, two hypothesis was formulated thus: Ho: inflation has no significant impact on exchange rate in Nigeria. Ho: consumer price index has no significant impact on exchange rate determination in Nigeria. During the research annual time series data for the period (1983-2007) was used. Linear  regression method with the application of OLS was used to estimated the parameter, t-test was used for the  test statistics, from the  analysis, the following were the findings:- the influencing power of inflation and consumer prices index to exchange rate is high and significant.  Inflation and consumer price index has a vital position in exchange rate determination in  Nigeria. The following are recommended.  Federal government to ensure sanity in the management of the foreign  exchange market. Need for a continued stimulation of the real and productive sectors. 

TABLE OF CONTENTS
Title page  i Approval page  ii Dedication  iii Acknowledgment iv Abstract v Table of contents vi
CHAPTER ONE INTRODUCTION  1.1 Background of the study  1 1.2Statement of the problem 12 1.3Objectives of the study 16 1.4Hypothesis of the study 17 1.5Significance of the study 18 1.6Scope/limitation of the study 20 1.7 Organization  of the study 21
CHAPTER TWO  LITERATURE REVIEW. 2.1Theoretical literature 23 2.2 Empirical literature 34 2.3 foreign exchange management during SAP 40 2.4 Dual exchange rate 45 2.5 Limitation of the previous studies 46 References 48
CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY 3.0 Methodology 50 3.1 Model specification  51 3.2 Method of evaluation 52 3.3 Decision rule 53 3.4 Data required and sources 55
CHAPTER FOUR 4.0 PRESENTATION AND ANALYSIS OF RESULTS 4.1 The empirical results56 4.2 Statistical test of significance 59 4.3 Evaluation of the working hypothesis 60 4.4 Second order tests 61 4.5 Examination of the algebraic sign of        the parameter estimated 62 4.6 Implication of the results 64
CHAPTER FIVE 5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 Summary of the findings 66 5.3 Recommendations   69 Bibliography71