Abstract This study investigated the impact of exchange rate volatility and pandemic outbreaks on foreign trade flows in Nigeria using quarterly time series data from 1981Q4 to 2025Q1. Specifically, the study investigated the impact of exchange rate volatility and pandemic outbreak on imports and exports in Nigeria. Exchange rate volatility was estimated using the Generalized Auto-regressive Conditional Heteroskedasticity (GARCH) model, while the Auto-regressive Distributed Lag (ARDL) technique was utilized. The found that exchange rate volatility has a positive and statistically significant effect on both imports and exports in the short run at a 5% level of significance, but in the long run, the impact to exchange rate volatility on foreign trade was negative but statistically insignificant at 5% level of significance; pandemic outbreaks, proxy by COVID-19 pandemic, was found to have a negative but statistically insignificant impact on imports and exports respectively in the short run at a 5% level of significance but in the long run, the impact of the pandemic became positive but statistically insignificant at a 5% level of significance. The study concluded that although exchange rate volatility may temporarily stimulate foreign trade flows in the short run, persistent exchange rate instability poses serious long-run challenges to Nigeria’s import and export sector. The study therefore recommended that the Central Bank of Nigeria should implement policies aimed at stabilizing the exchange rate and minimizing excessive speculative activities in the foreign exchange market. The study also recommended export diversification beyond crude oil and the promotion of domestic production to reduce import dependence and strengthen Nigeria’s resilience against future global disruptions and external shocks. Keywords: Exchange Rate Volatility, Pandemic, Foreign Trade Flows, Imports, Exports, ARDL, GARCH, Nigeria
Bassey et al. (Mon,) studied this question.