Predictive Modeling of Nigeria’s Currency in Circulation Using X-12 Autoregressive Integrated Moving Average Method

• Autor(a) principal: Bamanga, Muhammad Ardo
• Data de Publicação: 2023
• Outros Autores: Adams, Samuel Olorunfemi
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.26/45247; https://doi.org/Bamanga, M. A., and Adams, S. O. (2022). Predictive Modeling of Nigeria’s Currency in Circulation Using X-12 Autoregressive Integrated Moving Average Method. Dutch Journal of Finance and Management, 5(1), 21473. https://doi.org/10.55267/djfm/13340; https://doi.org/10.55267/djfm/13340
• topic: CBN; Currency in circulation; Money Supply; Seasonality; Seasonal Adjustment; X-12 ARIMA

In Nigeria, the average monthly quantity of currency in circulation (CIC) has increased by 269 billion nairas, reaching 2.13 trillion as of 2019 and 2.41 trillion as of 2020. The current value of currency in circulation is expected to be 2.88 trillion naira. The economy of Nigeria is impacted by the seasonal fluctuations in its currency, and it is unavoidable that the economy would need to be adjusted. The purpose of this study was to adjust the seasonal effect of eight days to Easter and Muslim holidays on CIC, model and predict the CIC in Nigeria using the United State Census Bureau's X-12 ARIMA Seasonal adjustment software. The data utilized in the study was the monthly amount of money in circulation that was taken from the Central Bank of Nigeria (CBN) Bulletin between January 2012 and March 2022. Natural logarithm was used to standardize the data, and series seasonality was removed using seasonal differencing. Based on these data, it is clear that X-12-ARIMA (2 1 1)(0 1 1) is the most accurate forecasting approach for Nigeria's CIC. The money in circulation in Nigeria from April 2022 through December 2022 will rise at a positive rate of 2.8% growth rate each month, with a predicted monthly mean CIC of 3.40 trillion by the end of the year 2022, according to this method's predictions. This is the first study on modeling and forecast of CIC in Nigeria that have utilize the United State Census Bureau X-12-ARIMA software, the findings can be extrapolated to the coming year, Nigerians may want to get ready for an increase in the amount of money in circulation during this time.