Fluctuating Exchange Rate and Nigeria’s Economic Growth: A Time Series Assessment of Over Three Decades’ Experience Using Interest Rate and Inflation Rates as Control Variables

This study examined the empirical investigation of the effect of fluctuating exchange rate on Nigeria’s economy from 1986 to 2021. The specific objective is to determine the combined effects of exchange rate, inflation, interest rate on gross domestic product and the individual effect of exchange rate, inflation, interest rate on the gross domestic product. The data were obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and National Bureau of Statistics. The regression analysis to provide meaning to the research through which the following findings were made; this study depicts on exchange rate, inflation rate, and interest rate contribution to gross domestic product. The consequences of this examination have demonstrated that exchange rate, inflation rate, and interest rate are serious determinants of gross domestic product in the Nigerian Economic Growth. The factors (exchange rate, inflation rate and interest rate) when presented synonymously, have performed well regarding economic growth. The finding suggested that exchange rate, inflation rate and interest rate are determinants of gross domestic product. A practical assessment of these dimensions revealed that exchange rate, inflation rate and interest rate were effectively stabilized and they will achieve a greater significant benefit in terms of gross domestic product. The result shows that, the higher stability of exchange rate, inflation rate and interest rate the higher the possibility of gross domestic product of Nigeria, which will definitely have positive significant impact on economic growth of Nigeria.