Devaluation of the national currency and the economic security of the State

Subject. This article examines the currency relations formed under the influence of the monetary policy of the Bank of Russia, and the dynamics of the official exchange rate of the ruble against the US dollar and the exchange rate at purchasing power parity. Objectives. The article aims to investigate the impact of changes in exchange rates on the development of the Russian economy. Methods. For the study I used the methods of correlation, logical, and statistical analyses. Results. The article identifies the main objectives of the monetary policy of the Bank of Russia related to the strengthening of the devaluation of the Russian ruble. It reveals a correlation between the dynamics of the official ruble exchange rate and changes in macroeconomic indicators characterizing the economic security of Russia. Conclusions and Relevance. The current monetary policy of the Bank of Russia restrains the country's economic advancement. The results obtained can be used by government authorities when developing currency policy measures.

Iran’s new president has few viable economic options

Significance He promised not to borrow any more from the central bank; to consider revising the official exchange rate; and to amend the budget bill to address the mounting deficit, projected to reach USD17bn in the current fiscal year ending March 2022, according to a September report by the Majlis Research Centre. Impacts Further price increases and rising poverty will increase social tensions. The new central bank governor could impose interest cuts justified in terms of sharia-compliance. Austerity measures including reduced capital spending will weigh on slow-recovering economic growth. Some bankrupt government-owned entities will close, resulting in redundancies.

Comparative Analysis of Naira/US Dollar Exchange Rate Volatility using GARCH Variant Modeling

This paper employed variant GARCH models to examined official, interbank and Bureau de change returns volatilities. Using monthly exchange rate of Naira/USD from January 2004 to September 2020 (2004:1-2020:9), the returns were not normally distributed and stationary at level. Ljung-Box Q statistic and Ljung-Box Q2 statistics of power transformed using power 0.25, 0.5 and 0.75 for conditional heteroscedasticity for lags of 6, 12 and 20 indicated present of conditional heteroscedascity in all returns. The study found exchange rate volatility in Official, interbank and Bureau de change exchange rate returns were persistent. However, Bureau de change return was more persistent while official exchange rate return was the least persistent. Also, leverage effect exist in all the three exchange rate returns and asymmetric model were the best model for estimating exchange rate return while IGARCH was the worst model to estimate exchange rate return in Nigeria. There is need to incorporate news impact when developing exchange rate policy by monetary authority in Nigeria.

Asymmetric Dynamics of Industrial Response to Exchange Rate Variation in Nigeria

Exchange rate policies are germane to industrial subsector development and the country at large. In this regard; the study examines the asymmetric pass through of official exchange rate policy on Nigerian industrial Subsector from 1970Q1 to 2019Q4. Non-linear ARDL method of estimation was adopted to ascertain the long run and short run asymmetric relation between official exchange rate and industrial output subsector. The results confirmed the presence of both long run and short run asymmetries between manufacturing output and official exchange rate. In the long run, increase in official exchange rate (appreciation) portends a corresponding increase in manufacturing output, while decrease in official exchange rate (depreciation) is negatively related to manufacturing output. On the other hand, the short run dynamics revealed that positive changes in official exchange rate choked off industrial output though statistically insignificance while negative change (depreciation) crowded in industrial output in Nigeria in the period under review against a priori expectation. The result also indicated that the crowding out impact of official exchange rate depreciation is more enduring (long lasting) compared to the positive variations. The presence of asymmetry is novel and instructive for policy pundits, executors, theorists, monetary authorities and allied agents to take decisive steps in order to stem the debilitating effects of exchange rate misalignment to encourage domestic investors, attract foreign investors and thus, stimulate the industrial subsector.

Cuba will struggle to keep inflation at bay

Significance So far, state-sector price controls and price caps on food and private markets have prevented runaway inflation. However, producers are withholding goods or selling on the black market, exacerbating shortages. Dollars trade on the street for twice the official exchange rate. Impacts Food shortages and rising prices will fuel discontent; criticism of the government will grow on social media. The dollarised retail sector and the ubiquitous black market will constrain coherent economic policy planning. Havana hopes COVID-19 vaccine development will help revive international tourism and become a new foreign currency earner.

PECULIARITIES OF THE STATE'S ACTIVITY IN THE FOREIGN EXCHANGE MARKET OF UKRAINE

Introduction. One of the urgent and urgent problems today is the effective activity of the state in the foreign exchange market of Ukraine, which in an unstable economic situation should be primarily aimed at stabilizing and supporting the national currency, which in turn will create a basis for economic growth and support economic processes in the country, establishing interna­tional relations and increasing the competitiveness of the economy as a whole. The purpose of the article is to study the peculiarities of the state's activity in the foreign exchange market of Ukraine, to determine the factors and problems that affect its condition. Results. This paper considers the peculiarities of the state's activity in the foreign exchange market, the regulator of which is the National Bank of Ukraine, which carries out operations in the foreign exchange market in order to stabilize the official exchange rate of the national currency. It was found that the introduction of the NBU inflation targeting regime and the intro­duction of flexible exchange rates allowed the state to reduce inflation and prevent the accumu­lation of imbalances in the economy. Conclusions. Based on the results of the study, it can be concluded that the state should help reduce negative external and internal factors by implementing an effective monetary policy, which should regulate foreign exchange activities aimed at accumulating Ukraine's gold and foreign exchange reserves, strengthening the national currency and stabilizing Ukraine's foreign economic relations with other countries. world.

Impact of Remittances Inflows and Macroeconomic Stability on Poverty in Nigeria (1977-2014)

The study explored the trend and effects of macroeconomic conditions on poverty (using household consumption as proxy for poverty) in Nigeria. It also analyzed how foreign migration remittances affect aggregate household poverty. It relied on secondary data analyzed using trend and cointegration analysis. It was found that on the long run, when gleaned from the perspective of aggregate household consumption, level of poverty in the country could be explained by economic growth (GDP per capita current USD, lngdp), volume of export trade as percentage of GDP (lnexptrgdp), official exchange rate of Nigerian Naira to USD (lnforex), inflation rate (lninf) and age dependency ratio of population (proxy for aggregate level of unemployment) (lnagedprat). Efforts must be put in place to promote youth employment opportunities, export market access to Small and medium scale enterprises, proper management of foreign exchange regimes. Since migration is not a sustainable source of income for the country, Nigerian authorities must provide education and skills acquisition opportunities too and enhanced working conditions to reduce dependency on immigration as a source of poverty reduction in households.

Productivity Bias Hypothesis: New Evidence from Parallel Market Exchange Rate

Aim/Purpose: The purpose of this study is to investigate Productivity Bias Hypothesis (PBH) in Nigeria using parallel (black) market exchange rate.Design/Methodology/Approach: The study focused on Naira-Dollar (N/$) parallel market exchange rate. Quarterly data from 1995 to 2018 were used. Data on domestic productivity and parallel market exchange rate were sourced from Central Bank of Nigeria (CBN) statistical bulletin, 2018 edition. US productivity data was sourced from Federal Reserve Economic Data. Autoregressive Distributed Lag (ARDL) was used as the estimation technique.Findings: The result reveals that parallel (black) market exchange rate support the presence of productivity bias hypothesis in Nigeria. Furthermore, the purchasing power parity hypothesis was rejected using the conventional unit root test. This implies that using official exchange rate, the study rejects the productivity bias hypothesis.Research Implications/Limitations: The implication of the study is that exchange rate in Nigeria should be determined freely in the foreign exchange market.Originality/Value/Contribution: Previous studies have used official exchange rate to test the validity of the productivity bias hypothesis, and the results can be basically described as mixed. Hence, this study differs from extant studies as it examined productivity bias hypothesis using parallel market exchange rate.

NEXUS BETWEEN FINANCIAL LIBERALIZATION, BALANCE OF PAYMENT AND ECONOMIC GROWTH IN NIGERIA

The objectives of this paper are to examine the nexus between financial liberalization, balance of payment and economic growth in Nigeria. The scope of this study due to data availability, especially on measures of balance of payment, covers the period of 1986-2017. This study adopts econometrics techniques of analysis by using Panel Unit Root Tests and Co-integration analysis which is used to determine the long run relationship among economic variables. To test the co-integration relationship this study followed the methodology proposed by Pedroni (1991) who extends the Engle and Granger (1987) two step procedure to heterogeneous panel data framework. The study adopts annual time series secondary data for the period of 1986 to 2017. Balance of payment, Official Exchange Rate, Inflation rate (%), Balance of trade, Trade openness, Real Gross Domestic Product growth, and Term of Trade, all data used were obtained from the World Development Indicators. The findings of this study revealed that an increase in exchange rate,interest rate, inflation rate, and trade openness have negatively affect economic growth. Hence, changes or movements in these variables do not necessarily prompt the liberalization decision in the real sector. Therefore, the need to address balance of payment is important, in accordance with the low rate of development in Nigeria. We therefore, recommend that government should monitor both Fiscal and Monetary policies’ variables that can significantly influence economic growth in Nigeria.That is, adequate balance of payment that can encourage appropriate financial liberalization should be put in place with, Official Exchange Rate, Inflation rate (%), Balance of trade, Trade openness.

Lower naira will not offset Nigerian recession risks

Subject Pressured naira. Significance The naira has depreciated by approximately 11% on the parallel market since the Saudi-Russia oil price war began, which dashed hopes of OPEC+ supply curbs to stem the price rout amid the escalating COVID-19 pandemic. This has hampered the Central Bank of Nigeria’s (CBN) ability to support the multiple exchange rate regime, prompting a sharp devaluation of the official exchange rate. Impacts The naira’s devaluation will accelerate rising inflationary pressures from the closure of Nigeria’s land borders last year. The CBN could impose damaging capital controls once more if the exchange rate falls further towards 500:1. With low funds in the oil savings fund, the authorities will likely limit their intervention against COVID-19 to soft loans from the CBN.