Exchange Rate Dynamics and Economic Growth in Nigeria
Keywords:Exchange rate, economic growth, interest rate, ordinary least square
The study examined the impact of exchange rate dynamics on economic growth in Nigeria using annual time series data from 1987 to 2020. The variables used in the study include real GDP, realexchange rate, consumer price index, interest rate, public debt, trade openness, gross capital formation. The study adopted ordinary least square techniques for the regression analysis. The empirical analysis showed that exchange rate, consumer price index, interest rate and public debt have negative and significant impact on economic growth. The results of the analysis show that gross capital formation has no significant impact on economic growth. Also, the result showed that trade openness has positive and significant impact on economic growth in Nigeria. The study recommended that the Nigeriangovernment and Central Bank of Nigeria should foster indigenous production of goods and services in order to reduce the impact of exchange rate dynamics on the aggregate economy.