Foreign Exchange Reserves and Import Demand in a Developing Economy: New Evidence from Nigeria

The attempt in this study has been to detect the influence of foreign exchange reserves on import demand Nigeria. With data spanning from 2000 2020, we estimated long-run and short-run function using ‘fully modified ordinary least squares’ ‘error correction model’ respectively after established that our variables were integrated first order cointegration exists. pointed out effect is positive but insignificant such turned negative significant short-run. Import price was also noted put forth a sway with its being significant. Income observed wield while rate became By elasticity coefficients, income greater compared every other variable coefficient than unity. It therefore becomes pertinent for actions toward reducing less or equal one be instituted. critical management regarded as an aspect inclusive stabilization strategy. Imports should targeted part effort compensate shortfalls domestic production. Furthermore, strategies reduce government spending raise taxes (contractionary fiscal policy) could growth which chief driver demand.