EXCHANGERATEVOLATILITYANDECONOMICGROWTHIN NIGERIA

This study examined exchange rate on economic growth of Nigeria from 1986 to 2020.Exchange rate is the rate at which one currency exchanges for another, it is the external value of a currency in respect to the external value of another currency.The objectives of the study is to empirically examine exchange rate and its volatility in the Nigerian economy. It will be shown in the study that exchange rate,inflation,interest rate has no significant impact on economic growth, thus making it a negative relationship. The significance of the study cannot be overemphasized as it is of great concern not only to policy makers but the economy at large. The main data used in this study is secondary; sourced from various issues of Central Bank of Nigeria Statistical Bulletin. The Ordinary Least Square (OLS) regression technique was used to analyze the data. Also in a view to afford difficulties while carrying out the regression analysis other methods such as Augumented Dickey Fuller test and ECMwasemployed, The result also revealed that exchange rate have no significant impacts on economic growth. The result also indicated that that interest rate and inflation rate have negative impact on economic growth respectively. We recommend that the government should properly manage exchange rate in Nigeria as its volatility has the potential to distort other factors (such as lending rate, labor force and price stability) that matter to the performance of the economy.Government should also encourage approved domestic investment to accelerate growth rather than relying on foreign direct investment. Interest rate should be managed in such a way that it will encourage savings but not to the extent of discouraging investment. Government should also reduce inflation to boost economic growth in Nigeria