THE NEXUS BETWEEN EXCHANGE RATE AND ECONOMIC GROWTH IN NIGERIA

Abstract

The essence of this study is to ascertain the nexus between exchange rate and economic growth in Nigeria, covering the period 1981 to 2018. The main purpose of the study includes to ascertain the link between exchange rate and economic growth (RGDP9 and the way to achieve economic sustainability in Nigeria. time series secondary data was collected and the study employed descriptive research design. Ordinary least square (DLS) method was used and the results of the analysis showed that 6% increase in exchange rate will increase RGDP with 0.045%, 1% increase in interest rate will increase RGP with 1.112%, 1% increase in inflation will reduce RGDP with 0.041% and 1% increase in money supply will reduce RGDP with 0.0005%. Exchange rate and money supply are significant while inflation and interest rate are insignificant. The study concludes that there is link between exchange rate and economic growth and recommend that government should ensure stable exchange rate to enhance investment and economic growth of Nigeria.