• E. A. OLUBIYI Department of Economics, Federal University Abeokuta, Nigeria
  • A. RAHEEM Department of Economics, Federal University Abeokuta, Nigeria
  • A. A. ADEMOKOYA Department of Accounting and Finance, Kwara State University
Keywords: Reserves, Remittances, Commodity Prices, Autoregressive Distribution, Inflation rate


This study provides additional information about the drivers of external reserves in Nigeria.  The result using Autoregressive Distributed Lag (ARDL) model estimation approach for the period 1980-2015 shows that remittances, among other macroeconomic variables, increased external reserves in the short run but weakens it in the long run. Remittances depletes external reserves through its effect on inflation rate and the nonsterilized intervention of the Central Bank.  Furthermore, regime shift to relatively floating exchange rate causes remittances to increase reserves.  From the foregoing, it is important for the authorities to continue operating relatively flexible exchange rate, and curtail excessive spending of remittances.


Keywords: , , , , .

JEL Classification: F31, F24, C22, F31



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