ATM Acquisition, Floating of the Naira, and Prices of Imported Commodities in Nigeria

This study examined the floating exchange rate system in Nigeria and its impact on the prices of Automated Teller Machines (ATMs). The study covered 18-months period spanning January 2023 to June 2024, encompassing the first year of the floating policy and six months under the preceding fixed exchange rate system. Secondary data on official exchange rates were sourced from the Central Bank of Nigeria (CBN) statistical reports, while parallel market rates were collated from reliable sources. Primary data were obtained through a structured questionnaire administered to employees of Deposit Money Banks (DMBs) in Nigeria. Pearson correlation analysis was employed to establish the relationship between official and parallel market rates, while Ordinary Least Squares (OLS) regression was adopted to model average ATM prices as a function of average official exchange rates. Findings revealed a very strong positive relationship between official and black-market rates. The regression model indicated a partial, above 50% exchange rate pass-through (ERPT) effect on average ATM prices. Descriptive analysis of survey responses further indicated that DMB employees perceived the floating policy as having a significant negative impact on ATM acquisition due to elevated prices. It is recommended that the monetary authorities intervene to curtail foreign exchange volatility, and that businesses with imported technology develop pricing strategies that account for price elasticity in response to exchange rate fluctuations.