The effect of exchange rate adjustments on Nigeria’s export performance: Evidence from the CBN (2000–2020)
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Background of the Study :
Exchange rate adjustments serve as a critical monetary tool for influencing a country’s trade dynamics and international competitiveness. In Nigeria, the Central Bank (CBN) has routinely employed exchange rate policies to enhance the competitiveness of Nigerian exports by altering relative price levels in the global market. Such adjustments are intended to make Nigerian goods more attractive abroad, thereby boosting export volumes and improving the overall trade balance (Nwosu, 2023). However, the outcomes of these policies have been mixed. Fluctuating exchange rates, coupled with external shocks and domestic economic vulnerabilities, often create uncertainty that can counteract intended benefits. Moreover, while some industries may thrive under a depreciated currency, others face increased production costs and volatile market conditions (Umeh, 2024). This study critically examines the effect of CBN-led exchange rate adjustments on export performance, investigating the balance between competitiveness gains and potential economic distortions. Through an analysis of historical data and policy outcomes, the research seeks to elucidate how monetary interventions impact export volumes, product competitiveness, and overall trade dynamics in Nigeria (Adewale, 2025).
Statement of the Problem
Notwithstanding the strategic use of exchange rate adjustments by the CBN, Nigeria’s export performance has not consistently met projected targets. The interplay of monetary policy with global market fluctuations has generated a volatile environment for exporters. Challenges such as increased production costs, currency volatility, and competitive pressures have undermined the stability and growth of export sectors (Ike, 2023). Moreover, the benefits of a more competitive exchange rate are often offset by the adverse impacts of inflation and external economic shocks. These issues raise concerns about the long-term effectiveness of exchange rate policies as a tool for promoting sustainable export growth. This study aims to dissect these challenges and provide a nuanced analysis of the exchange rate adjustments’ impact on export performance, highlighting areas for potential policy improvement (Chukwuemeka, 2024).
Objectives of the Study:
1. To analyze the relationship between exchange rate adjustments and export performance in Nigeria.
2. To assess the role of the CBN in implementing effective monetary policies.
3. To identify challenges and propose policy recommendations to enhance export competitiveness.
Research Questions:
1. How do exchange rate adjustments influence export performance in Nigeria?
2. What role does the CBN play in stabilizing export trends through monetary policy?
3. What are the primary challenges faced by exporters in a volatile exchange rate environment?
Research Hypotheses:
1. H1: Exchange rate adjustments positively affect export performance.
2. H2: The CBN’s monetary policies significantly influence Nigerian export competitiveness.
3. H3: External economic shocks moderate the impact of exchange rate adjustments on exports.
Significance of the Study (100 words):
This research offers critical insights into the effect of exchange rate adjustments on Nigeria’s export performance, informing policymakers and industry stakeholders. By examining the CBN’s monetary strategies, the study highlights key factors influencing trade competitiveness and export stability. The findings are intended to support the development of robust monetary policies that balance export promotion with macroeconomic stability, thereby contributing to improved trade performance and economic growth (Nwachukwu, 2023).
Scope and Limitations of the Study:
The study is limited to evaluating the effect of exchange rate adjustments by the CBN on Nigeria’s export performance, focusing exclusively on monetary policy interventions and export sector outcomes.
Definitions of Terms:
1. Exchange Rate Adjustments: Changes in the value of a country’s currency relative to others, implemented to influence trade dynamics.
2. Export Performance: The ability of a country to generate foreign exchange through the sale of goods and services abroad.
3. CBN: The Central Bank of Nigeria, responsible for formulating and implementing monetary policies.
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