Nigeria Exchange Rate and Terms of Trade
Overview and Objectives
Research towards exchange rate and trading terms, the Nigerian perspective. Noting in how exchange rate and trading terms affect Nigeria’s overall economic status and such transition economies linking towards business activities of the country mainly pointing towards the tourism sector in Nigeria where the latter points are essential. The research will examine relationship of tourism trade and business cycles using such exchange structures within correlations certain exports and terms of trade assuming in , and effect, producing deviations from purchasing power parity and real interest rate parity. Terms of trade shocks cause real appreciations and positive interest differentials, although productivity shocks have opposite effects in Nigeria. Exchange rates in transition economies undergo depreciation followed by continuing real appreciation. The study will be documenting as well as analyzes certain grounding fact with regards to Nigeria Exchange Rate and The Terms of Trade. Research provide estimates of real exchange rate that will be based on sample of possible 5 to 10 tourism sites in the country, estimates well dynamics of exchange rate into business tourism transition phase. Thus, suggesting that continuing appreciation corresponds to combination of return following initial trading terms and rates appreciation of Nigeria economy.
Questions
1. What exchange rate all about? What is the standing form of exchange rates in Nigeria? Discuss
2. How does exchange rates affect Nigeria economic status? Particular on business tourism sector of the country? How exchange rates be manifested through transition of economies?
3. What adheres to the effectiveness of exchange rates allowing Nigerian tourism sector to grow well into the global market stance?
4. What is meant by trade terms? How does trading terms affect Nigeria economic status? Particular on business tourism sector of the country?
5. How trading terms be manifested through transition of economies? How can Nigeria trading terms work in its tourism sector? Through transition of economies?
Hypothesis
Hy 1: There is positive impact between Exchange Rate and Terms of Trade in Nigeria towards transition of economies and tourism sector. Hy 2: There is negative impact between Exchange Rate and Terms of Trade in Nigeria towards transition of economies and tourism sector
Sample Literature
The exchange rate and trading terms in policy notion does play crucial role in providing increased incentives for exporting. Nigeria will be successful in promoting manufactured exports experienced real exchange rate depreciation, leading to a significant increase in the domestic relative price of tradeable to non tradeable. The responsiveness of exports of goods and services to certain exchange rate however, export promoting exchange rate policy cannot be sustained unless monetary and fiscal policies are fully consistent with it. In many developing countries mismanagement of tourism based economy and trade policies leading to exchange rate misalignment from which there was over valued exchange rate with respect to Nigeria’s market clearing level. The exchange rate misalignment is damaging to economic performance mostly, to manufactured exports, as it decreases the profitability of production of tradeable. The damaging influence of exchange rate misalignment as being shown by (1988) and, (1990) linked for diverse groups in developing countries. and (1993) show negative influence of exchange rate misalignment on total exports for panel of several countries. Moreover, inconsistent economic, trade, exchange rate policies increase the variability of the real exchange rate. Indeed, high exchange rate volatility sends conflicting signals to economic agents and increases uncertainty of tourism based investments as well as of the profitability of producing tradable goods. The negative influence on manufactured exports has been established by (1993) on panel of ten developing countries including Nigeria.
Methodology
For the methodology, the use of case study approach will be realize presenting in literature studies about exchange rates and trade as noted by various proponents comprising of such reviewed articles and journals. Nigeria, to investigate link between exchange rate volatility and trading exports. Although empirical literature of research is extensive, clear consensus about study nature and importance will have to be seen. Focusing on role of trade and trade policy in achieving tourism growth in the region. Nigeria in high levels of trade restrictions have been an important obstacle to exports in the past and their reduction can be expected to result in significantly improved trade performance in the region. The removal of export restrictions, dismantling of marketing boards, relaxation of quantitative restrictions on imports and lowering of import tariffs will sharply increase exports. The role of trade policy in economic growth is of enabling nature: extremes of export taxation and import restrictions can surely suffocate nascent economic activity, an open trade regime will not on its own set an economy on sustained growth path.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment