scholarly journals Oil price movements, exchange rate and Nigerian manufacturing sector growth: a short-run analysis

2018 ◽  
Vol 15 (3) ◽  
pp. 329-342
Author(s):  
Adeleke Omolade ◽  
Harold Ngalawa
Keyword(s):  
Exchange Rate ◽  
Inflation Rate ◽  
Manufacturing Sector ◽  
Price Change ◽  
Price Volatility ◽  
Oil Price ◽  
Sharp Drop ◽  
Oil Price Volatility ◽  
Short Run ◽  
Price Movements

The paper conducts a short-run analysis of the implications of oil price movements and exchange rate relationship for the Nigerian manufacturing sector growth between January 2008 and September 2017. Monthly data are extracted on variables such as oil price, exchange rate, inflation rate, interest (lending) rate, money supply and the manufacturing sector growth rate. Oil price movements are viewed in terms of both volatility and change. While EGARCH is used to estimate oil price volatility, oil price change is measured using Hamilton index for both oil price sharp drop and jump. The SVAR results indicate that exchange rate and inflation rate are more responsive to sharp drop in oil price. The two variables also have the highest impact on the manufacturing sector growth. Findings further indicate that Nigerian manufacturing sector is more affected at the cost side than the output side. This underscores the importance of tackling the inflation pressure in Nigeria from the structural perspective as against the monetary perspective.

scholarly journals Monetary Transmission Channel, Oil Price Shock and the Manufacturing Sector in Nigeria

2019 ◽  
Vol 19 (1) ◽  
pp. 89-113
Author(s):  
Adeleke Omolade ◽  
Philip Nwosa ◽  
Harold Ngalawa
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Rate ◽  
Manufacturing Sector ◽  
Output Growth ◽  
Oil Price ◽  
Monetary Transmission ◽  
Oil Price Shock ◽  
Price Shock ◽  
The Exchange Rate

Abstract Research background: The need for diversification of the Nigerian economy has been emphasized and the manufacturing sector has a major role in this. Being an oil producing country, monetary policy is an important macroeconomic policy that has always been used to manage the influence of oil price shock on the manufacturing sector. Purpose: The study examines the relationship between oil price shock, the monetary transmission mechanism and manufacturing output growth in Nigeria. Research methodology: The study applied the structural vector auto regression (SVAR) modelling technique and a descriptive analysis. Results: The results of the study show that the exchange rate is mostly affected by the oil price shock, while the monetary policy instruments and inflation rate are also very responsive to the exchange rate shock. The manufacturing sector output growth has also been shown to be strongly affected by the inflation rate and monetary policy shocks. Novelty: The study has revealed the most effective channel via which oil price shocks affect manufacturing output. The exchange rate channel of the monetary policy transmission mechanism is the most significant channel through which oil price shock affects manufacturing output growth in Nigeria. This shows that effective management of the exchange rate policy via the appropriate monetary policy approach can be used to minimize the adverse effect of oil price shocks on Nigerian manufacturing output.

scholarly journals Modeling and Forecasting Gold Prices

2020 ◽  
Author(s):  
Richmond Sam-Quarm ◽  
Mohamed Osman Elamin Busharads
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Price Volatility ◽  
Gold Price ◽  
Oil Price ◽  
Future Market ◽  
Open Interest ◽  
Long Run ◽  
Short Run ◽  
Japanese Yen

The aim of this paper is to explore the reasons of gold price volatility. It analyses the information function of the gold future market by open interest contracts as speculation effect, and further fundamental factors including inflation, Chinese yuan per dollar, Japanese yen per dollar, dollar per euro, interest rate, oil price, and stock price, in the short-run. The study proceeds to build a Dynamic OLS model for long-run equilibrium to produce reliable gold price forecasts using the following variables: gold demand, gold supply, inflation, USD/SDR exchange rate, speculation, interest rate, oil price, and stock prices. Findings prove that in the short-run, changes in gold price does granger cause changes in open interest, and changes in Japanese yen per dollar does granger cause changes in gold price. However, in the long-run, the results prove that gold demand, gold supply, USD/SDR exchange rate, inflation, speculation, interest rate, and oil price are associated in a long-run relationship.References

scholarly journals How does gold and oil price volatility affect Turkish financial markets?

2020 ◽  
Vol 9 (4) ◽  
pp. 262-270
Author(s):  
Hakan Öner ◽  
Hande Kılıç Satıcı
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Interest Rates ◽  
Price Volatility ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Volatility ◽  
Causality Relationship ◽  
Us Dollar ◽  
Turkish Lira

Gold and oil price volatilities are thought to have an impact on financial markets. The main aim of this study is to examine the effects of changes in gold and oil prices on Turkish financial markets. For this purpose, the effects of gold and oil price volatilities on nominal US dollar/Turkish lira exchange rate, Borsa Istanbul 100 Index and Turkey 10-year bond interest rates are used to represent Turkish financial markets are analysed by Granger Casuality Test. The study comprises daily data over the period of June 1, 2010 - April 30, 2017. According to the results of the analysis, there is no causality relationship from gold and oil prices to Turkish financial markets. On the other hand, it is concluded that there is a one-way causality relationship from BIST100 index to Turkey 10-year bond interest rate and two-way causality relationship between BIST 100 index and nominal US dollar/Turkish lira exchange rate.

scholarly journals Determinants of Inflation in the Local Economy

ETIKONOMI ◽  
2018 ◽  
Vol 17 (1) ◽  
pp. 1-10
Author(s):  
Jaka Sriyana
Keyword(s):  
Exchange Rate ◽  
Minimum Wage ◽  
Inflation Rate ◽  
Local Level ◽  
Price Change ◽  
Local Economy ◽  
Price Changes ◽  
Vector Error Correction ◽  
Long Run ◽  
Short Run

This research analyzes the determinants of inflation rate in the local economy. It uses co-integration and vector error correction to capture the long and short run relationship between inflation rate and other economic variables. We find that the determinants of inflation rate in Yogyakarta are minimum wage, economic growth, and monetary variables indicated by BI-rate.  More finding, exchange rate also contributes to the price change. This research finds evidence of long-run causality between minimum wage and inflation and unidirectional relationship from wage to inflation in the short run. This finding confirms the proposition of non-neutrality wage on price changes. The inflation rate in the local economy depends not only on the regional indicator but also depends on international changes reflected in the exchange rate. Monetary variable indicated by BI- rate also partially contributes to the price changes at the local level. Overall, the local government has successfully managed the price changes.DOI: 10.15408/etk.v17i1.7146

scholarly journals Crude oil price-exchange rate nexus in Pakistan

2018 ◽  
Vol 1 (2) ◽  
Author(s):  
Farhat Iqbal ◽  
Abdul Raziq
Keyword(s):  
Exchange Rate ◽  
Crude Oil ◽  
Price Volatility ◽  
Positive Association ◽  
Nominal Exchange Rate ◽  
Oil Price ◽  
Currency Exchange ◽  
Oil Price Volatility ◽  
Daily Data ◽  
Asymmetric Power

This paper studies the association between price of crude oil and the Pakistani Rupee-US Dollar exchange. Asymmetric power autoregressive conditional heteroscedastic (APARCH) model is used to measure the influence of oil price on the nominal exchange rate using daily data of extreme oil price volatility (2006 – 2013). This model is found to fit the data well and the results reveal a high degree of volatility persistence and leverage effect in returns. This study also establishes a positive association between currency exchange rate and oil price. These findings provide insight into the transmission link between the global oil market and exchange rate.

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