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Emprical Determination of The Parallel Currency Market Preminum In Nigeria

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Authors

AKINBOBOLA, Temidayo Oladiran
stagiaire
DOI: https://doi.org/10.57054/codesria.pub.633

Keywords:

Black market foreign exchange market parallel marke Nigeria

Synopsis

This study focuses on the provision of both theoretical foundations and empirical evidence on the parallel market premium in Nigeria. The parallel market premium was traced to the variations in major macroeconomic variables in the economy.
The increase in the parallel market premium observed after the introduction of economic reforms in Nigeria, in 1986, bad adverse effects on all the sectors of the economy. Structural and monetary models of parallel market premium were constructed in this work covering the period of 1987 to 1993. Quarterly data was used to examine the impact of structural and
monetary variables on the premium. The models were estimated using the ordinary least square (OLS) method of estimation.
The main findings of the study include among others, the existence of a structural relationship between the direction of exports and the premium; a low tariff rate which will reduce the level of parallel market premium, and a more gradual approach to the liberalisation of the exchange rate so as to discourage the widening of the gap between the official and the parallel
exchange rates, that is, the premium. Our empirical results confirmed Ansu (1991) and, Ghei and Kiguel (1992) argument about the relationship between money stock and the parallel market premium, i.e. money stock has a positive relationship with the parallel market premium. The obvious policy implication is that, for a unification of the foreign exchange rates, devaluation which is inflationary in consequence should be gradual while emphasis should be placed on a strict monetary and fiscal

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Author Biography

AKINBOBOLA, Temidayo Oladiran, stagiaire

A THESIS SUBMITTED TO THE FACULTY OF SOCIAL SCIENCES, OBAFEMI AWOLOWO UNIVERSITY, ILE-IFE, NIGERIA, IN PARTIAL FULFil,MENT OF THE REQUIREMENTS FOR THE A WARD OF THE DEGREE OF A
. MASTER OF SCIENCE IN ECONOMICS 1996

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June 22, 2023

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APA Oladiran, A. T. (2023). Emprical Determination of The Parallel Currency Market Preminum In Nigeria. CODESRIA. https://doi.org/10.57054/codesria.pub.633

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Chicago Oladiran, AKINBOBOLA, Temidayo. Emprical Determination of The Parallel Currency Market Preminum In Nigeria. Dakar: CODESRIA, 2023. https://doi.org/10.57054/codesria.pub.633.

MLA Oladiran, AKINBOBOLA, Temidayo. Emprical Determination of The Parallel Currency Market Preminum In Nigeria. CODESRIA, 2023. https://doi.org/10.57054/codesria.pub.633.

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