The Impact of Oil Price Volatility on the Real Exchange Rate in Nigeria: An Error Correction Model

Abstract

In this paper, we empirically investigated the link between real exchange rates and real oil prices in Nigeria. We studied to find out whether the real exchange rate is positively related to the real oil prices as predicted by the models in previous research. We also investigated whether real oil prices can predict long-run movements in real exchange rates. The Error Correction Method (ECM) of analysis was used in the investigation.