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| Title: | Monetary Policy Dynamics And The Performance Of Nigeria External Sector |
| Author(s): | IORTYER .A Dominic, UMAR A. Princess & OSHONA Femi |
| Abstract: | The role of monetary policy in economic growth and stability cannot be over emphasized. Thus the paper assesses effect of monetary policy dynamics on the Nigerian external sector represented by the volume of international trade from 1980 to 2020.The aim of the paper was to determine the short and long run impact of Lending Rate (LR), Monetary Policy Rate (MPR)and, Exchange Rate (EXCH) on the volume of international trade (INTV) as a proxy for external sector. Modern econometrics techniques of unit root for stationarity check using the ADF approach, bound test cointegration was conducted, appropriate lags were selected based on the Akaike information criteria, and the specified ARDL model was estimated to determine both the short and long run impacts. Findings revealed that Lending Rate, Monetary Policy Rate and exchange rate in Nigeria has negative impacts on the volume of international trade in the short run gut positive impacts in the long run. The variables were all statistically significant. The Fstatistics equally proved the overall significance of the explanatory variables to influence the dependent variable. The Adjusted Coefficient of determination (2_R) indicates 84% of total variation in international trade Volume is explained by the explanatory variables. The Durbin Watson test show 2.0 indicates the absence of serial correlation. Consequently upon the findings the study thus recommend suitable monetary policy measures that could encourage export promotion and all exports oriented activities of the economy. |
| Keywords: | Monetary policy, international trade, policy rate. Lending rate |
| Journal: | Journal of Contemporary Research in Economics and Development Studies (JCREDS) |
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