EXCHANGE RATE VOLATILITY AND VOLUME OF IMPORTS IN NIGERIA (POST COVID 19 EFFECT)

The study investigated exchange rate volatility and volume of imports in Nigeria for the period 1981-2020. The main objective of the study was to determine effect of exchange rate volatility on volume of imports in Nigeria. The study utilized annual time series data obtained from World Development Indicators (WDI) and Central Bank of Nigeria statistical bulletin for the period 1981-2020 with the help of the Auto Regressive Distributive Lag (ARDL) model of estimation. Results showed that official exchange rate volatility had a positive and insignificant relationship in the current year with volume of imports. In the 1st year lag, official exchange rate volatility had a positive relationship and significant relationship with volume of imports in Nigeria but it was insignificant in the long run; non-oil imports had a positive relationship with the volume of imports in the current and 1st year period and also in the long run at 5% level of significance. Based on these findings, the study recommended that Nigeria Government should do everything economically possible to strengthen the value of Naira in the FOREX market. This however should exclude pumping billions of dollars into the FOREX market as this only creates a temporary economic condition while efforts should be made to ensure exchange rate stability in order to stabilize Nigeria’s economy to recover fully from the post effect of Covid 19 global pandemic of 2020.