NAIRA REDESIGN AND FOREIGN EXCHANGE RATE IN NIGERIA
Abstract
This study examined the relationship between Naira redesign and exchange
rate in Nigeria, with money supply, inflation rate and interest rate included as
explanatory variables. The study employed annual time-series data covering the
period 1981–2024. The Autoregressive Distributed Lag (ARDL) model was
adopted to examine the short-run and long-run relationships among the
variables. The long-run estimates showed that Naira redesign had a positive but
statistically insignificant effect on the exchange rate. Money supply had a
positive and statistically significant effect on the exchange rate, while interest
rate also had a positive and statistically significant effect. Inflation rate had a
negative but statistically insignificant effect in the long run. The study concludes
that Naira redesign, when considered in isolation, did not have a statistically
significant long-run effect on the exchange rate in Nigeria, while monetary
factors, particularly money supply and interest rate, played more significant
roles in determining exchange-rate movements. The study recommends that
currency redesign policies should be implemented alongside effective monetary
and foreign-exchange management measures. It also recommends prudent
management of money supply and a stable interest-rate framework to support
exchange-rate stability in Nigeria and strengthen policy coordination between
monetary authorities and market institutions to promote stability.
This article is available as a PDF download
Published in JOURNAL OF BUSINESS & ECONOMY
ISSN: 2808-5428
This article appears in our peer-reviewed academic journal
View JournalRelated Articles
Explore similar research in our collection
LIQUIDITY MANAGEMENT AND FIRM VALUE OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA
BENEDICT SOJE, ERNEST EBONG INYANG, BENJAMIN EMOFE UDOLU
Oct 21, 2026
This study examines the effect of liquidity on firm value specifically among consumer goods firms i...
View ArticleFOREIGN PORTFOLIO INVESTMENT VOLATILITY AND ECONOMIC GROWTH IN NIGERIA: EVIDENCE FROM TIME-SERIES DATA
PERETIEMO, JUDE CLARKE, AKEKERE, JONAH
Oct 20, 2026
This study examined the relationship between foreign portfolio investment volatility and economic g...
View ArticleDEPOSIT MONEY BANKS, MANUFACTURING SECTOR AND ECONOMIC DEVELOPMENT IN NIGERIA: AN ARDL APPROACH
Wosu, Chidi, Ph.D
May 20, 2026
This study examines the relationship between deposit money banks, manufacturing sector, and econom...
View Article