Exchange Rate Volatility and Foreign Capital Inflows in Nigeria (1990 - 2016) : Cointegration, DOLS and Granger Causality Approach

2019 ◽  
Vol 4 (2) ◽  
pp. 161-170
Author(s):  
Aderemi , Timothy Ayomitunde
Keyword(s):  
Exchange Rate ◽  
Granger Causality ◽  
Foreign Capital ◽  
Exchange Rate Volatility ◽  
Capital Inflows ◽  
Foreign Capital Inflows

scholarly journals Capital Inflows, Inflation, and the Exchange Rate Volatility: An Investigation for Linear and Nonlinear Causal Linkages

2013 ◽  
Vol 52 (3) ◽  
pp. 183-206 ◽  
Author(s):  
Abdul Rashid ◽  
Fazal Husain
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Jel Classification ◽  
Nominal Exchange Rate ◽  
Capital Inflows ◽  
Monetary Expansion ◽  
Domestic Prices ◽  
Foreign Capital Inflows ◽  
Linear And Nonlinear ◽  
The Exchange Rate

This paper empirically examines the effect of foreign capital inflows on domestic price levels, monetary expansion, and the exchange rate volatility for Pakistan using linear and nonlinear causality tests. The key message emerging from the analysis is that there is a significant inflationary impact of capital inflows, in particular during the period of surges in capital inflows. Specifically, we find evidence of a significant nonlinear Granger causality running from capital inflows to the change in domestic prices. We also show that domestic prices are nonlinearly caused (in Granger sense) by the growth of domestic debt and money supply-to-GDP ratio. Our results, however, suggest that the market interest rate and the nominal exchange rate do not have significant relationships with domestic prices. The findings suggest that there is a need to manage the capital inflows in such a way that they should neither create an inflationary pressure in the economy nor fuel the exchange rate volatility. JEL Classification: C22, C32, F21, F31, F32 Keywords: Capital Inflows, Inflationary Pressures, the Exchange Rate Volatility, Monetary Expansion, Nonlinear Dynamics

scholarly journals Exchange Rate Fluctuations in Pakistan, Causes and Remedies

2020 ◽  
Vol 9 (4) ◽  
pp. 15-20
Author(s):  
SAFIA BEGUM ◽  
MUHAMMAD NAEEM ◽  
AMJAD AMIN
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Granger Causality ◽  
Trade Balance ◽  
Foreign Capital ◽  
Exchange Rate Volatility ◽  
Exchange Rate Fluctuations ◽  
Response Variance ◽  
The Government ◽  
Relationship Of

Exchange rate plays a crucial part in the development of the country and it highlights the prosperity of the country's economy. This study takes various set of determinants, which affect the instability of rate of exchange in the country. This study investigated the relationship of interest rate, inflation, Forex, trade balance and inflow of net foreign capital with exchange rate. The study analyzed the data for the period 1972 to 2014 for Pakistan. Multi-level statistical estimation techniques, VECM, Johnson co-integration, impulse response, variance decomposition and granger causality are applied. The results demonstrated long relationship of interest rate, trade balance, foreign exchange reserve, net foreign capital inflow and exchange rate. The study also confirmed the positive effect of these variables on exchange rate. The study can be especially significant for the government, to make appropriate action to better deal with exchange rate volatility. Keywords: VECM, Granger Causality, Instability of Exchange Rate, Pakistan.

scholarly journals Impact of Foreign Capital Inflows and Money Supply on Exchange Rate: A Case Study of Pakistan

2017 ◽  
Vol 3 (1) ◽  
pp. 83-90 ◽  
Author(s):  
Sajid Ali ◽  
Raima Nazar
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Foreign Aid ◽  
Money Supply ◽  
Direct Investment ◽  
Foreign Capital ◽  
Capital Inflows ◽  
Series Data ◽  
Foreign Capital Inflows ◽  
The Impact

The study attempts to examine the impact of foreign capital inflows and money supply on exchange rate of Pakistan. For this purpose we have undertaken time series data for the period of 1973-2016. Annual data for the period 1973-2016 is used, taken from Economic Survey of Pakistan (various issues) and International Financial Statistics (IFS). The main variables used in our analysis are exchange rate, openness, workers' remittances, foreign direct investment, foreign aid and money supply. Simple Linear Regression model with ordinary least method (OLS) is used to analyse the results. Money supply is positively and significantly related to exchange rate. Worker's remittances (WREM), foreign aid (FAID), foreign direct investment. (FDI) and openness (OPP) are negatively and significantly related to exchange rate.  The study shows that foreign capital inflows and workers' remittances significantly appreciate the exchange rate in the case of Pakistan.

Foreign capital inflows and economic growth: the experience of low-income countries in Sub Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Atif Awad
Keyword(s):  
Low Income ◽  
Foreign Capital ◽  
Ordinary Least Squares ◽  
Capital Inflows ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Content Type ◽  
Long Run ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose This paper aims to investigate the long-run impact of selected foreign capital inflows, including aid, remittances, foreign direct investment (FDI), trade and debt, on the economic growth of 21 low-income countries in the Sub Saharan Africa (SSA) region, during the period 1990–2018. Design/methodology/approach To obtain this objective and for robust analysis, a parametric approach, which was dynamic ordinary least squares, and a non-parametric technique, which was fully modified ordinary least squares, were used. Findings The results of both models confirmed that, in the long run, trade and aid affected the growth rate of the per capita income in these countries in a positive way. However, external debt seemed to have an adverse influence on such growth. Originality/value First, this is the initial study that has addressed this matter across a homogenous group of countries in the SSA region. Second, while most of the previous studies regarding capital inflows into the SSA region have focused on the impact of only one or two aspects of such foreign capital inflows on growth, the present study, instead, examined the impact of five types of foreign capital inflows (aid, remittances, FDI, trade and debt).

scholarly journals Foreign Capital Inflows and Growth of Employment In India: An Empirical Evidence from Public and Private Sector

2016 ◽  
Vol 8 (2) ◽  
pp. 189
Author(s):  
Narender Khatodia ◽  
Raj S. Dhankar
Keyword(s):  
Foreign Direct Investment ◽  
Private Sector ◽  
Direct Investment ◽  
Foreign Capital ◽  
Positive Impact ◽  
Capital Inflows ◽  
Public And Private ◽  
Indian Economy ◽  
Foreign Capital Inflows ◽  
Public And Private Sector

The role of foreign capital in economic growth has been a burning topic of debate in countries world over including India. It is not possible for a developing country like India to grow without sufficient foreign capital inflow, technology and employment generation. The Indian government has taken many initiatives to attract foreign investment to boost the Indian economy since the liberalization process started in 1991. As a result, India has received Foreign Direct Investment (FDI) to the tune of US $ 380215 million by the end of June 2015. This study has assessed the growth of employment in public and private sector by the flow of foreign capital, comprising of Foreign Direct Investment, Foreign Portfolio Investment (FPI), External Commercial Borrowings (ECBs), and NRI Deposits in India during the period 1991 to 2012. The study has also analyzed the trends of employment in public and private sectors of Indian economy. We find that overall foreign capital inflows, except for the FPI and NRI deposits, have a significant positive impact on the growth of private sector employment.

scholarly journals An Empirical Investigation on Foreign Capital Inflows and Economic Development in Nigeria

2020 ◽  
pp. 63-76
Author(s):  
G. Tunde, Monogbe ◽  
J. Emeka, Okereke ◽  
P. Ebele, Ifionu
Keyword(s):  
Economic Development ◽  
Foreign Direct Investment ◽  
Capital Flows ◽  
Direct Investment ◽  
Foreign Capital ◽  
Capital Inflows ◽  
Portfolio Investment ◽  
Foreign Portfolio Investment ◽  
Foreign Capital Flows ◽  
Foreign Capital Inflows

In an attempt to attained sustainable level of economic development in a nation, empirical studies as well as financial theories posit that foreign capital inflows play a lead role. As such, this study set out to empirically investigate the extent to which foreign capital flows promotes economic development in Nigeria. Time series data between the periods 1986 to 2018 were sourced from the central bank of Nigeria statistical bulletin and world bank data based. The study proxied foreign capital flows using foreign direct investment, foreign portfolio investment, foreign aids and external borrowings which is decomposed into multilateral and bilateral loans while Human development index is used as proxy for economic development. The study further employed unit root test, co-integration test, error correction model and granger causality test to ascertain the direction of relationship. Findings reveal that of the five indices of foreign capital inflows, three (foreign  portfolio investment, foreign aids and bilateral loan) prove to be significant in promoting economic development in Nigeria, while foreign direct investment and multilateral loan are negatively  related to economic development in Nigeria. As such, the study conclude that foreign capital inflows in the form of foreign portfolio investment, foreign aids and bilateral loans are significant in boosting economic development in Nigeria. Therefore, we recommend that managers of the Nigerian economic should create an enabling financial environment as this will help in accelerating further inflows of portfolio investment and thus boost economic development in Nigeria.

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