Exchange rate and economic growth nexus: An impact analysis of the Nigerian economy
Keywords:Exchange Rate, Economic Openness, Economic Growth, ARDL, ECM
This study examines the impact of the exchange rate, as an important determinant of economic growth in Nigeria between 1980 and 2019. Secondary data was used and sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin 2016. The econometric techniques used in the analysis were: Unit Root Test, Johansen Cointegration Test, and Error Correction Model (ECM). The result revealed that exchange has a positive and statistically significant impact on economic growth at a 5% level of significance. But the result further revealed that economic openness was found to have impacted negatively on economic growth. Based on these findings it was recommended that the government through its monetary authority such as (CBN) should redesign the existing monetary policies to maintain a stable exchange rate. Lastly, since the economic openness hurts economic growth, it is therefore suggested that the government should sustain its current efforts in diversifying the economy in the country and disregard the notion that openness generates economic growth in the country.
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