Economics, Econometrics and Finance
3 years ago

Oil price volatility negatively impacts Nigeria's exchange rate, affecting investor confidence.

Journal of Economics and Trade
MODELING THE DYNAMICS OF CRUDE OIL PRICES AND ITS INTERACTION WITH EXCHANGE RATE IN NIGERIA
Isaiah O. Ajibola, Nwaze Obini Nweze, Monday Osagie Adenomon

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The study looked at how changes in crude oil prices affect Nigeria's exchange rate. They used data from 2000 to 2020 and found that global economic factors mainly influence Nigeria's stock market. When oil prices are unstable, investors tend to hold onto cash instead of investing. The exchange rate is negatively impacted by sudden changes in oil prices but responds positively to oil price volatility. However, the study showed that the control of oil price volatility on the exchange rate is not significant.