The Impact of Covid-۱۹ and Crude Oil Price on the NGN/USD Exchange Rate Using Vector Autoregressive Coefficients

The impact of Covid-۱۹ on economies appears global and Nigeria is not insulated from its shock. The exchange rate of a country indicates the health of that economy. In this work, the effect of the novel Covid-۱۹ pandemic on the Nigerian Naira (NGN) and the United States Dollar (USD) exchange rate in the face of fluctuating crude oil prices were examined. Using the vector autoregressive computational model, the impact of crude oil, confirmed cases of people infected with Covid-۱۹ and the total death due to Covid-۱۹ on the NGNUSD exchange rate was investigated. The result shows that crude oil price contributed positively to the NGNUSD exchange rate only at the first lag while it negatively affected the exchange rate at the second and third lag. The total confirmed cases contributed positively in the first and third lag while making a negative contribution in the second lag. The total death due to covid-۱۹ contributed negatively in the first and third lag, while contributing positively in the second lag. It was obvious that the Nigerian exchange rate was affected by the Covid-۱۹ pandemic both positively and negatively at different stages during the covid-۱۹ pandemic. It was suggested that the diversification of the economy is a must for the NGN/USD exchange rate stabilization in the nearest future.

کلیدواژه ها:

Covid-۱۹ ، Nigerian exchange rate ، crude oil price ، vector autoregressive (VAR) model ، impulse response ، Cholesky decomposition