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Financial Development and the Current Account in Nigeria

Oyadeyi, Olajide and Akinbobola, Temidayo (2022): Financial Development and the Current Account in Nigeria. Published in: IOSR Journal of Economics and Finance , Vol. 13, No. 2 (31 March 2022): pp. 65-74.

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This study explored the response of current account to different financial development indicators. Quarterly data from the period of 1981 to 2018 on current account, debt stock, stock market capitalization, stock market value traded, financial liberalization, total deposit money banks’ asset, total monetary asset, private sector credit and real GDP were analyzed using Lag Augmented VAR (LAVAR) procedure. Based on the findings, the study was able to prove that only the current account exerted significant influence on its future values and sustainability, while financial development indicators did not influence the current account for Nigeria. Consequently, efforts should be directed at all stakeholders by developing financial development strategies that would improve the importation of industry raw materials and equipment to improve the volume of domestic production and exportation, thereby improving Nigeria’s current account position and sustainability levels.

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