Tag Archives: Foreign Exchange

Crude Oil Production, Prices, Export And Foreign Exchange Rate, Do They Interact? Evidence from Nigeria (2006 – 2014) (Published)

The purpose of the study is to determine the extent to which Foreign Exchange Rate is influenced by or associated with crude oil selling price, crude oil export and crude oil production and the direction and magnitude of their granger causalities in Nigeria oil and gas sector (2006 -2014). Data were collected from Central Bank of Nigeria Statistical Bulletin and multiple regression, correlation and granger causality approach were adopted in the analysis of data. It was found that foreign exchange rate is positively influenced by volume of crude oil export and the selling price per barrel of crude oil, though not significantly; while a weak and insignificant relationship exists between crude oil export, crude oil production and foreign exchange rate. There is no Granger Causality running from any of the explanatory variables namely crude oil export, crude oil selling price and crude oil production, to foreign exchange rate. This implies that there are other factors that exert more far reaching impact on foreign exchange rate than crude oil production, export and sales price in Nigeria. Hence, the regulatory agencies in Nigeria such as the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) should strengthen other macroeconomic and microeconomic variables in other to foster a stable foreign exchange regime.

Keywords: Causality, Correlation, Foreign Exchange, OPEC, Regression, crude oil

Indian handicraft industry and exports: An economic analysis (Review Completed - Accepted)

India is one among the culturally rich countries in the world. The country is fortunate enough to possess some highly skilled artisans. They have increased the fame of Indian handicrafts around the globe. The Indian handicrafts industry is highly labour intensive, cottage based and decentralized industry. It plays a significant & important role in the country’s economy. The crafts of India are diverse, rich in history and religion. The aesthetics of each state in India reflect the influence of different empires. Throughout centuries, crafts have been rooted as a culture and tradition within communities of India. Indian handicraft earns well from its exports and also the subject for global exhibitions representing India.

Keywords: Export, Foreign Exchange, Global, Handicrafts

FUEL PRICE HEDGING AND ITS EFFECT ON PROFITABILITY OF KENYA AIRWAYS LIMITED (Review Completed - Accepted)

The cost of fuel has been cited by air transport companies as a critical factor in the stability of profits and consequently financial success. This has been identified to have a significant effect on profitability of the firm. In an attempt to counter the effects of rising fuel costs airlines have found it prudent to hedge on fuel costs. However, there have been arguments that in the long run, hedging does not improve profitability but serves to dampen the volatility of fuel prices (Jay, 2012). The main objective of the study was to find out the effect of price hedging on the profitability of Kenya airways Ltd. The study reviewed and identified knowledge gaps in related literature. It adopted an ex-post facto research design. The study performed extant document analysis between the 2009 to 2012 financial years of Kenya Airways Ltd. The study adopted document analysis of data obtained from financial reports, annual reports and management accounts reports. Graphs, tables and pie charts were used to present data. The data was analyzed using statistical methods such as mean, standard deviation, multiple linear regression and correlation analyses were also conducted

Keywords: Foreign Exchange, Kenya airways, Price hedging, Profitability

FOREIGN EXCHANGE MANAGEMENT AND THE NIGERIAN ECONOMIC GROWTH (1960 – 2012) (Published)

The study examined foreign exchange management and the Nigeria economic growth from 1970 to 2012. The scope of the study is limited to Nigeria. The empirical model for the study was based on the conclusion of our theoretical framework. The data used for this study were majorly sourced from the Central Bank of Nigeria Bulletin (2011). The ordinary least square estimation techniques within the error correction model (ECM) framework are employed in the study. The choice of the ECM is to enable it account for the explanatory potent of the regressions in both the short run and long run as well as ascertaining the dynamics of attaining long run equilibrium, an issue which is the key to studies related to macroeconomics variables one of which is the exchange rate. The Johansen-Joselius Co- Integration test is employed in this study, to test for the presence of a long run relationship between the dependent variable (exchange rate) and the independent variables. The result of the co-integration as revealed show that trace statistics and maximum eigen values are greater than the critical values at 5% level of significance. It shows that there is a unique long run relationship among Y, EXCR, EXPT,IMP, INF and FDI. The result further shows that the explanatory variables explain and account for about 99% of variation in economics growth peroxide by GDP, which is an evidence of a good fit of the model. The f- statistics shows that the explanatory variables are jointly significant in explaining economic growth (dependent variable). The result above shows export and foreign direct investment are statistically significant in determining economic growth which considered at 5% and 10% respectively. However, exchange rate import and inflation are found to be statistically non – significant. It is against this back drop of the above findings, that it is recommended that effort be made to increase the consumption of made in Nigeria goods, which includes the usage of raw material that can be sourced locally by Nigerian industries in order to increase foreign exchange earnings. The implication of this is that local industries should be encouraged to look inward for their raw material. Having uncovered from the study that the nexus between economic growth and foreign exchange management being a short run relationship, it is necessary that the foreign exchange management policy initiatives be made to satisfy the shorts–run behavioral expectations of the variables used in uncovering this fact.

 

 

Keywords: Foreign Exchange, Nigeria, economic growth