THE RELATIONSHIP BETWEEN THE EXCHANGE RATE FLUCTUATIONS AND ECONOMIC GROWTH IN NIGERIA
Nigeria to determine the extent at which exchange rate fluctuations influence economic growth in Nigeria between 1997 and 2017. Descriptive research design was adopted. Secondary data on gross domestic product (GDP), exchange rate and inflation rate were obtained from the Central Bank of Nigeria (CBN) bulletins between 1997 and 2017. Ordinary least square method and Pearson’s product moment correlation were used to analyse the data collected. The study revealed decline in Nigeria economic growth since 2002 as shown by continuous drop in GDP. Study also showed that there is a significant relationship (F (1, 19) = 34.627; Adj R2 = 0.627; p<0.05) between exchange rate fluctuation (inflation rate, foreign exchange and debt) and economic growth. The findings of this study indicated a multiple regression coefficient (R = 0.042), which means that though inflation rate was found to be positive and high but without significant relationship to economic growth. It is therefore recommended that fiscal and monetary policy authority should implement policies and programmers that will ensure that the country’s currency is in high demand in the exchange market. This will increase the nation’s gross domestic product and foreign earnings thereby strengthening the nation’s currency in the exchange market, enhancing exchange rate stability and reduce inflation rate.
Keywords:Economic Growth, exchange Rate Fluctuations, Inflation Rate, Gross Domestic Product
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