EFFECT OF EXCHANGE RATE FLUCTUATION ON INFLATION, UNEMOLOYMENT, EXPORT AND IMPORT ON ECONOMIC GROWTH OF NIGERIA (1978 - 2023)
Abstract
This study investigates the effect of exchange rate fluctuation on inflation, unemployment, exports, imports, and economic growth in Nigeria between 1978 and 2023. The research seeks to determine how exchange rate movements influence major macroeconomic variables and overall economic performance. Secondary data were obtained from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), and the World Bank. The study employs time series econometric techniques including descriptive statistics, unit root test, Johansen cointegration test, and the Autoregressive Distributed Lag (ARDL) model. The findings reveal that exchange rate fluctuations significantly affect inflation and imports, while their effects on exports, unemployment, and economic growth vary over time. The study concludes that exchange rate stability is essential for maintaining price stability, encouraging investment, promoting exports, and achieving sustainable economic growth. It recommends sound monetary and fiscal policies aimed at stabilizing the foreign exchange market and strengthening domestic production.
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