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The Impact of Exchange Rate Fluctuation on the Nigerian Economic Growth: An Empirical Investigation

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  • J.O. Adeniran
  • S.A. Yusuf
  • Olatoke A. Adeyemi

Abstract

This research study examined the impact of exchange rate on economic growth from 1986 to 2013. The main type of data used in this study is secondary; sourced from Central Bank of Nigeria Statistical Bulletin of various issues. From 1986 being the year the monetary authority shifted from fixed exchange rate regime to flexible exchange rate regime to 2013. The correlation and regression analysis of the ordinary least square (OLS) were used to analyze the data. The result revealed that exchange rate has positive impact but not significant with (ß =0.014, t = 1.783, Pns) this is affirms previous studies that developing countries are relatively better off in the choice of flexible exchange rate regimes. The result also indicated that interest rate and rate of inflation have negative impact on economic growth but not significant with (ß = - 0.002, t = - 0.015, Pns) and (ß = -0.023, t = - 0.716, Pns) respectively. Therefore, the paper recommended that government should encourage the export promotion strategies in order to maintain a surplus balance of trade and also conducive environment, adequate security, effective fiscal and monetary, as well as infrastructural facilities should be provided so that foreign investors will be attracted to invest in Nigeria.

Suggested Citation

  • J.O. Adeniran & S.A. Yusuf & Olatoke A. Adeyemi, 2014. "The Impact of Exchange Rate Fluctuation on the Nigerian Economic Growth: An Empirical Investigation," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(8), pages 224-233, August.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:8:p:224-233
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    References listed on IDEAS

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    13. Ugochukwu J. Nwoye & Justina N. Obiorah & Chukwunonso Ekesiobi, 2015. "Effect of Nigeria Macroeconomic Environment on the Performance of the National Economy: Implications," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(7), pages 42-51, July.
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    15. Kenny S, Victoria, 2019. "Exchange Rate Management and Economic Growth: An FMOLS Approach," MPRA Paper 93125, University Library of Munich, Germany.
    16. Ekundayo P. Mesagan & Olorunfemi Y. Alimi & Ismaila A. Yusuf, 2018. "Macroeconomic Implications of Exchange Rate Depreciation: The Nigerian Experience," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 16(3 (Fall)), pages 235-258.
    17. Amadou Jawo & Mohammed Jebou & Lamin Fatou Bayo, 2023. "The Relationship between Inflation, Exchange Rate, Money Supply and Economic Growth in The Gambia," Technium Social Sciences Journal, Technium Science, vol. 40(1), pages 213-222, February.
    18. Edim Ndifon Obim & John Ime John & Akaninyene Billy Orok, 2018. "Interest Rate Policy and the Growth of the Nigerian Economy (1990-2016)," Journal of Banking and Financial Dynamics, Sophia, vol. 2(1), pages 16-23.
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    20. Tzu-Yi Yang & Chieh Liu & Yu-Tai Yang & Ssu-Han Chen, 2023. "The dynamic effect of trading between China and Taiwan under exchange rate fluctuations," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-9, December.

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