Title:
THE NIGERIA CURRENT ACCOUNT BALANCE AND INFLATION RATE: AN EMPIRICAL ANALYSIS

Authors:
Patrick, OLOGBENLA, Nigeria

Abstract:
The study examines the impact of inflation rate on current account balance in Nigeria between 1985 to 2020. The study adopted descriptive analysis, unit root test, Bound test, Autoregressive Distributed Lags Analysis, (ARDL), Error Correction Cointegrating Model (ECCM), and other post estimation tests such as Heteroskedasticity and Serial LM autocorrelation test. Based on the findings from the study, it was discovered that that there were short-run and long-run relationships between inflation rate and current account balance in Nigeria. It was also discovered that there was a direct impact of inflation rate and other independent variables such as exchange rate, trade openness, interest rate and gross capital formation on current account balance. However, the study recommend that government should redesign monetary policy to support international trade to address persistence leakages across all the country’s boarder. By so doing, the local investment and productivity of goods and services would rise hence, inflation would fall to curb external shocks.