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| Title: | Is exchange rate pass-through to import prices in Nigeria a short-run phenomenon? |
| Authors: | Poloamina, I.D. Babatunde, M. Adetunji  Oyinlola, M. Abimbola |
| Year: | 2009 |
| Periodical: | Ibadan journal of the social sciences (ISSN 1597-5207) |
| Volume: | 7 |
| Issue: | 1 |
| Pages: | 55-67 |
| Language: | English |
| Geographic term: | Nigeria |
| Subjects: | exchange rates prices |
| Abstract: | The rapid movements in exchange rate in Nigeria became apparent after the Structural Adjustment Programme (SAP) was introduced in 1986. From then on, there was a significant shift in trade and exchange rate policy towards liberalization. This informed the fall in the nominal effective exchange rate between 1985 and 1989 at an average of 41 percent annually and an average depreciation of 71 percent annually of the official exchange rate. This article examines the extent of exchange rate pass-through into import prices between 1980 and 2006. A price model that recognized the development in the tradable and non-tradable sectors of the economy was used. At the aggregate level, exchange rate pass-through to import prices was found to be complete. However, only the short-run effect of exhange rate pass-through was evident and there was no long-run relationship between the variables. In the short run, a 1 percent depreciation of the exchange rate led to a 1 percent increase in import prices. In addition, the immediate past values of world export prices and tariff rates explain some of the variation in import prices. Bibliogr., notes, sum. [Journal abstract, edited] |