Foreign Exchange Market and Economic Performance in Nigeria

Council; Francis; Peter Ego Ayunku

doi:10.56201/jafm.vol.11.no9.2025.pg236.245

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Foreign Exchange Market and Economic Performance in Nigeria

Council, Francis & Peter Ego Ayunku

Abstract

This study evaluates the impact of the foreign exchange rate on economic performance in Nigeria from 1996 to 2022. The study adopted an ex-post-facto research design, and the data were sourced from the Central Bank of Statistical Bulletin, 2022. The study used Gross Domestic Product as proxied for economic performance to measure independent variables; whereas, exchange rate, import trade, export trade, and monetary policy rate were used to measure foreign exchange rate in Nigeria. Ordinary Least Squares (OLS) estimation technique was used to test the formulated hypotheses. The study reveals a positive significant impact of exchange rate on Gross Domestic Product in Nigeria. Import trade has a positive significant impact on Gross Domestic Product in Nigeria. Export trade has a negative insignificant impact on Gross Domestic Product in Nigeria. The study also indicates a negative insignificant impact of monetary policy rate on Gross Domestic Product in Nigeria. Coefficient of determination indicates that about 78% of the variations in economic performance can be explained by changes in foreign exchange rate variables in Nigeria. The study concludes that foreign exchange rate has a positive significant impact on economic performance in Nigeria. Hence, the study recommends that policy makers are advised to closely monitor its movements. The deregulation of exchange rate sector policy should be encouraged to ensure the availability of foreign currency.

Keywords

ForeignExchangeRate EconomicPerformance

References

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Foreign Exchange Market and Economic Performance in Nigeria

Abstract

Keywords

References

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