EXCHANGE RATE PASS-THROUGH TO CONSUMER PRICES IN NIGERIA

  • Ogundipe A. Adeyemi Department of Economics Development Studies Covenant University, Ota
  • Egbetokun Samuel College of Education, Ijanikin

Abstract

The increasing overdependence of Nigerian economy on imports has necessitated the need to continually examine the effect of exchange rate shocks in consumer prices. The paper adopts a Structural Vector autoregressive to estimate the pass-through effect of exchange rate changes to consumer prices. Using the Variance Decomposition analyses, the study found a substantially large exchange rate pass-through to inflation in Nigeria. Finding shows that exchange rate has been more important in explaining Nigeria’s rising inflation phenomenon than the actual money supply. Therefore, it is recommended that Nigerian economy focuses on policies that ensure exchange rate stability and sound monetary surveillance.

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Published
2013-09-30
How to Cite
Adeyemi, O. A., & Samuel, E. (2013). EXCHANGE RATE PASS-THROUGH TO CONSUMER PRICES IN NIGERIA. European Scientific Journal, ESJ, 9(25). https://doi.org/10.19044/esj.2013.v9n25p%p