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Impact of Exchange Rate Volatility on Nigerian Macroeconomic Performance

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Vincent, A.A., Olusegun, I.F., Ojo, A.G. and Dorcas, J.O., 2021. Impact of Exchange Rate Volatility on Nigerian Macroeconomic Performance. United International Journal for Research & Technology (UIJRT), 2(11), pp.113-120.

Abstract

This study examines the relationship between exchange rate volatility and macroeconomic performance in Nigerian from the period of 1986-2019. Using Bounds Co-Integration Test and auto-redistribution lag model (ARDL). The result shows that the short run result showed that the exchange rate has a positive association with GDP in the current period, but that the relationship is negative in the lagged periods. The link is negative in the long run, which is consistent with a priori expectations. In the long run, interest rates have a positive relationship with gross domestic product (GDP). The study recommends among other things that the Nigerian government must ensure that the exchange rate does not continue to depreciate, as this will stifle economic growth. When the supply of foreign currencies in the economy is low, the central bank should pump in more foreign currency to keep the exchange rate market stable within the economy.

Keywords: Exchange Rate, Economic Growth, Reserves and ARDL.

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