The Exchange Rate and COVID-19 Pandemic: An Application to the Nigerian Economy
The Exchange Rate and COVID-19 Pandemic: An Application to the Nigerian Economy

Summary/Abstract: The recent tremors in the Naira exchange rate amidst the COVID-19 pandemic are quite worrisome. Countries that depend on the exportation of transport-driven resources could be worse hit. This study aimed to examine the impact of the Covid-19 pandemic on the exchange rate in Nigeria. The Naira exchange rate was made the criterion variable while the Covid-19 pandemic, disaggregated as Covid-19 new cases, Covid-19 period, and Covid-19 new deaths was put as the predictor variables. ARDL technique was employed as informed by the unit root tests. The finding revealed that, in both the short run and long run, the period of COVID-19 had a significant direct impact on the exchange rate in Nigeria. However, COVID-19 new cases and new deaths could not significantly impact the exchange rate. The study, therefore, suggests that Nigerians should be aware that the upsurge in the naira/dollar rate is due to the COVID-19 period, among other causes. The economy should step-up other internationally demanded products like crude oil, and produce in large quantities to cushion the effect of low export.

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