Tag Archives: Exchange Rate

Empirical Analysis of Agricultural Foreign Direct Investment on Capital Market Performance in Nigeria (1981-2018) (Published)

There is a widespread perception that Foreign Direct Investment (FDI) aids economic growth in Nigeria evident by various contributions made by researchers on this phenomenon, but these attendant benefits must be transmitted through one of the viable real sectors, and one of such sectors is the agricultural sector. Understanding the linkage between the flows of foreign direct investment to agricultural sector as if affects capital market becomes imperative since the capital market enhances financial stability in the country. Using descriptive analysis, Augmented Dickey-Fuller (ADF), parsimonious error correction model, this paper therefore examined the effect of agricultural foreign direct investment on capital market performance in Nigeria from 1981 -2018. Basically data used in this study are exchange rate, trade openness, agricultural foreign direct investment and total market capitalization sourced from Central Bank of Nigeria(CBN) statistical bulletin 2018, The result obtained shows that the inflow of FDI to agricultural sector does not follow a regular pattern as agricultural FDI has long run positive  relationship with capital market performance,   exchange rate has negative relationship with the explained variable, trade openness also maintained a slow but positive relationship with capital market performance. The study concluded that there exist relationship between the phenomenons of the study, based on these findings, it is recommended that there is need for the government to device several means that would motivate the foreign investors to diversify their investment from oil sector to the agricultural sector since it has a positive influence on the capital market performance. Secondly, government needs to redesign the existing exchange rate policy and ensure full implementation of policy that would revive the value of our local currency.

Citation: Eze Gbalam Peter and Okoyan Krokeme (2021)  Empirical Analysis of Agricultural Foreign Direct Investment on Capital Market Performance in Nigeria (1981-2018), European Journal of Accounting, Auditing and Finance Research, Vol.9, No. 7, pp.20-37

Keywords: Agricultural Sector, Exchange Rate, Foreign Direct Investment, capital market performance.

Financial Globalization and Exchange Rate uncertainty in Nigeria: A Band-Pass Filter Approach (Published)

Exchange rate uncertainty has been one of the many challenges implicated as the biggest developmental and growth obstacle facing Nigeria as a nation. This study estimates financial globalization, output growth and financial uncertainty nexus in Nigeria. The research is carried under the assumption that exchange rate uncertainties are deemed to impact on the volume of export and import trading activities. Thus, we adopted the Pairwise Granger Causality model to estimate the causality relationships among financial globalization, output growth and volatility in exchange rate using a Single Equation Englo-Granger approach. The best lag selection criteria were employed to choosing the best lag for this analysis. We provide a link between the short-run and the long-run effect of the model(s). This study found that they is a positive interaction between financial volatility (exchange rate uncertainty) and output volatility in Nigeria. It shows that as financial volatility such as exchange rate uncertainty is increasing, output volatility will also be increased in the same direction. The government and the monetary authorities should be more focused on the strengthening the exchange rate, since stable exchange rate improves the terms of trade, strengthen the local capacity and increases output growth. However, addressing the heightened risks, including financial and operational risks due to economic recession as well as due to the market reforms themselves have remained the challenges of globalization in Nigeria.

Keywords: Exchange Rate, Nigeria, band-pass filter approach, financial globalization

Migrant Remittances and Naira Price of the Dollar (Published)

This study investigated the possibility that the large amount of diaspora dollar remittance to the Nigeria economy could positively impact the naira price of the dollar (exchange) rate. Our methodology employed the Johansen cointegration test (JCT).The trace statistics result shows the null hypothesis that: there is no cointegration is rejected. Thus the trace test shows, there is at least one co-integrating vector. Furthermore, the output of the Max-Eigen statistics indicates that there is a strong evidence to reject the null hypothesis of no cointegration, implying there is long run relationship among the variables. Though diaspora remittance (logrem) has positive and significant long run effect on the domestic price of the naira (logexch) to the dollar, its coefficient (3.220574) is not sufficiently large when compared with oil price (24.56832) (logoilprice). We therefore conclude that though diaspora remittances influences the domestic naira price of the dollar, its impact on the domestic on the wider exchange rate market is insignificant.

Keywords: Exchange Rate, Foreign Reserves, Migration, diaspora remittance

Effect of Foreign Direct Investment on Exchange Rate of Naira: A Multi-Sectoral Analysis (Published)

This study examines the effect of foreign direct investment on exchange rate of naira. It covers the period between 1990 and 2016. The unusual depreciation of the naira accompanied by the declining trend of foreign direct investment inflows among other things necessitated this study. Ordinary Least Square Regression Analysis was used to estimate the model relationships. It made use of time series secondary data with five explanatory variables (FDI inflows to Agriculture, forestry and fishery, building and construction, manufacturing and processing, mining and quarrying and transport and communication) and one dependent variable (Exchange Rate). The data were sourced from Central Bank of Nigeria (CBN) statistical bulletin, World Bank Data and Journal Articles. Tests that were carried out include Unit Root Test, Co-integration test and Granger Causality test. The study reveals that there is a positive significant effect of FDI inflow to building and construction on real exchange rate; there is a positive significant effect of FDI inflows to mining and quarrying on real exchange rate and there is a positive significant effect of FDI inflows to transport and communication on real exchange rate. However, there is an universe effect of FDI inflows to agriculture, forestry, fishery on real exchange rate and an inverse effect of FDI inflows to manufacturing and processing on real exchange rate. Based on these findings, the study recommends: massive investment of local investors in the agricultural and manufacturing sectors to strengthen the exchange rate of naira and also serious efforts to increase foreign direct investment inflows in the building, mining and transport sectors in Nigeria be sustained and improved upon to have a strong exchange rate of naira.   

Keywords: Depreciation, Exchange Rate, Foreign Direct Investment, Naira, Study, building and construction, inflows, manufacturing and processing, mining and quarrying

An Empirical Analysis of National Debt, Debt Servicing and the Growth of the Nigerian Economy (Published)

Nigeria’s national debt and debt servicing expenditure has been on the increase since from 1981 till date, this has prompted the researchers to study the impact and economic implications of this rise in debt and debt servicing profile on the growth of the Nigerian economy. The study adopted annual debt stock, debt service expenditure and the control variables of exchange rate and inflation rate as the independent parameters which were regression against gross domestic product as proxy for the growth of the Nigerian economy and response variable. Secondary data were collected from Central Bank of Nigeria Statistical Bulletin and the Debt Management Office for the ranging from 1981 to 2019. The study employed multiple regression techniques assisted by the E-views computer software for the analysis of data. The results revealed that annual national debt and exchange rate had significant impact on the growth of the Nigerian economy with a P-value of 0.0180 and 0.0070 respectively which were less than the 0.05 level of significance. Debt servicing and inflation rate had no significant impact on economic growth in Nigeria with a P-value of 0.1054 and 0.5011 respectively. In the overall, the results of the model indicated that debt and debt servicing had statistically significant effect on economic growth with overall probability of F-statistics value of 0.050683 which less than the 0.05 significance level. Based on the findings the study recommended that the monetary authorities should put in place appropriate steps to properly manage the Nation’s debt stock and the cost of servicing debt; and that the country’s borrowings should be invested on viable capital projects as well as human capital that will yield economic returns.

Keywords: Debt, Debt Servicing, Exchange Rate, Gross Domestic Product, Inflation Rate

Oil Resource Abundance and Agricultural Productivity in Nigeria: An Autoregressive Distributed Lag Approach (Published)

This paper analyzed and estimated the impact of oil abundance on agricultural productivity in Nigeria for the sample period of 1980 – 2018. The Autoregressive Distributed Lag model (ARDL) estimated with the Ordinary Least Square technique was used to examine the relationship among the variables. Findings from the model revealed that there was a negative and significant relationship between oil abundance and agricultural productivity in the short run while a negative and insignificant relationship existed in the long run. There was a direct and insignificant relationship between growth rate of GDP and agricultural productivity. The study therefore recommended subsidizing agricultural inputs and setting in place incentives that will keep people in the agricultural sector.

Keywords: Agricultural Productivity, Exchange Rate, Lending Rate, Oil abundance

Effect of Market Risks on the Financial Performance of Firms in Nigeria (Published)

Business operations are surrounded by different degrees of uncertainties (risks) ranging from market risks, financial risks and operating risks. This study has chosen to investigate one of the components of the risks (market risk) and to ascertain how the risks affect the activities of firms in Nigeria. Four hypotheses were formulated in line with the objectives of the study. The study employed causal research design and used secondary data. The research covers the twelve (12) firms listed under Oil and Gas sector on the Nigerian Stock Exchange. Secondary data were collected from Central Bank of Nigeria Statistical Bulletin and the financial statements of the firms which spanned from 2014 to 2018. The data were analysed with descriptive statistics, correlation and multiple regression analysis. The results therefrom indicate that exchange rate has significant effect on both ROA and ROE of Oil and Gas firms. Additionally interest rate has significant effect on ROE and insignificant effect on ROA. More results show that commodity price change has no significant effect on both ROA and ROE, also equity price change has no significant effect on ROA and ROE of firms in Oil and Gas sector in Nigeria. The study recommends among other things that the firms should adopt the use of hedging to control exchange rate changes and government should maintain a low interest rate that will aid firms increase their profitability.

Keywords: Exchange Rate, Market Risk, Oil price

Currency devaluation and Non-Oil export of Nigeria: 1986-2018 (Published)

The paper examined the effect of currency devaluation on the Non-oil export of Nigeria. The study covered the period of 1986 to 2018. Secondary data were sourced from Central Bank of Nigeria Statistical Bulletin of various issues. Independent variables include: Inflation Rate (INFR), Exchange Rate (EXR), and Money Supply (MS) while Non-Oil Export (NOE) represented the dependent indicator. Ordinary Least Square Regression Model was used to analyze the short run relationship between variables used for the study. The variables were also subjected to Augmented Dickey Fuller and Philip Perron Unit Root test, Johansen Co-integration and Granger Causality Tests was adopted to analyze the effect of currency devaluation on non-oil export in Nigeria. The result showed that EXR had a negative significant effect while MS had positive significant influence on non-oil export but INFR had negative but insignificant relationship on the dependent variable in Nigeria hence devaluation of currency influenced non-oil export in Nigeria negatively. The Nigerian Government needs to increase its competitive chances by either revaluating its currency or banning importation of some items produced locally to boost the domestic economy. The study provides the extent at which the devaluation of currency influences the non-oil export in Nigeria.

Keywords: Exchange Rate, Inflation Rate, Money Supply, Non-Oil Export

Impact of Foreign Direct Investment on Economic Development in Nigeria (Published)

This study was carried out to ascertain the impact of foreign direct investment on economic development in Nigeria between 1981 and 2018. Data employed for this study was elicited from World Bank Data Base-World Developmental Indicators of 2018 and Central Bank of Nigeria Statistical Bulletin of 2018. This study employed gross fixed capital formation as proxy for economic development in Nigeria, and exchange rate was employed as a controlled variable while data on foreign direct investment inflow to Nigeria was adopted as the explanatory variable. This study employed Auto Regressive Distributed Lag (ARDL) Model to analyze data; other diagnostic tests such as: stability test, Auto correlation test, Heteroskedasticity test and Breusch-Godfrey Serial Correlation LM test were also carried out and they confirmed the validity and reliability of the model employed. The inferential results pointed out that foreign direct investment impacted positively but insignificantly on economic development in Nigeria between 1981 and 2018. These results also conform to apriori economic expectations. The study recommended that government of Nigeria should provide enabling environment that will be conducive for doing business, so as to attract additional inflow of foreign direct investment. Government can provide enabling business environment by provision of steady supply of electricity and ameliorating or exterminating insurgent activities in the country and restore confidence of investors to come into Nigeria and invest, when this is done, the volume of foreign direct investment into Nigeria would increase and would enhance exports thereby reducing exchange rate.

Keywords: Economic Development, Exchange Rate, Foreign Direct Investment, gross fixed capital formation and auto regressive distributed lag (ARDL) model.

Currency devaluation on the Exportation Revenue: A study of Nigeria, South Africa and China (2000-2017) (Published)

The study examines the impact of currency devaluation on total export revenue in Nigeria, South Africa and China. Secondary data were sourced from World Bank Data Atlas for inflation rate (INFR), exchange rate (EXR), money supply (MS) and total export revenue (TER) for the period of 2000 to 2017 and were subjected to Augmented Dickey Fuller and Philip Perron Unit Root test, Johansen Co-integration and Vector Error Correction Model. The study discovers that EXR, INFR and MS were unable to impact exportation revenue in Nigeria and South Africa while showing strong impact on exportation revenue of China. The result also shows that only China enjoys long run relationship while Nigeria and South Africa currency devaluation variables showed absence of long run relationship with exportation revenue. Thus, the study concludes that currency devaluation in China impact negatively on the export position of Nigeria and South African economies. Hence, the study recommends maintenance of China’s currency devaluation position while Nigeria and South Africa should re-evaluate and re-adjust their currency devaluation procedures to improve exportation revenue.

Keywords: Currency depreciation, Exchange Rate, Inflation Rate, Money Supply, exportation performance

An Empirical Evaluation of the Effect of Foreign Investment Inflows on Economic Growth in Nigeria (Published)

This study examined the effect of foreign investment inflows on economic growth of Nigeria, using secondary data for the period 2001 to 2018. The study adopted gross domestic product as the indicator of economic growth and the dependent variable, while foreign direct investment, foreign portfolio investment and exchange rate were used as explanatory variables. The data on the study variables covering the period 2001 to 2018 were collected from the CBN Statistical Bulletin. The study employed descriptive statistics and multiple regression analysis technique based on the E-view computer software for analyzing data. The results of analysis revealed that foreign direct investment, foreign portfolio investment and exchange rate had significant positive influence on gross domestic product. Based on the results of the empirical analysis, the study concluded that foreign investment inflows have made the desired positive impact on the growth of the Nigerian economy. However, a lot still need to be done to create conducive investment climate to attract sufficient amount of foreign investors into the productive sectors of the Nigerian economy. The study recommended that the regulatory authorities should formulate policies and create the enabling environment to attract foreign investments into Nigeria.

Keywords: Direct, Exchange Rate, Foreign, Investment, Portfolio, economic growth, inflows

Vector Autoregression (VAR) Analysis of the Nexus between Exchange Rate Volatility and Private Domestic Consumption in Nigeria (Published)

This paper models the empirical relationship between exchange rate variations and private domestic consumption in Nigeria using vector auto regression (VAR) method. In addition to exchange rate, household disposable income and recurrent expenditure were introduced in the model as part of the explanatory variables. The study sample spanned from 1990 to 2016 and the data on each of the variables were sourced from the Central Bank of Nigeria Statistical Bulletin. The unit root test results indicate that all the variables are difference stationary with all I(1) order. Additionally, the test for cointegration reveals that variables have long run relationship as evidenced in the outcomes of the trace and maximum eigenvalue tests. This provides basis for rejecting the null hypothesis of no cointegration. The estimated VAR model reveals that exchange rate lagged for one period has significant negative effect on private domestic consumption. 1 percent increase in exchange rate, on the average, increases private domestic consumption by 1.733 percent. The dynamic effects of disposable on private consumption are mixed. From the VAR estimates, lag 2 of disposable income negatively influenced private consumption whereas lag 3 is positively linked to private domestic consumption. Additionally, public recurrent expenditure lagged for 3 periods has significant positive effect on private domestic consumption. This paper, therefore, concludes that increase in the exchange rate is associated with increasing level of private domestic consumption. Owing to the findings, it is recommended that the CBN should ensure that effective exchange rate management system is put in place to maintain a stable rate of exchange and provide pathway for rapid and sustained increase in private domestic consumption.

Keywords: Exchange Rate, Private domestic consumption, VAR and Nigeria., disposable income

Evaluation of Petroleum Crude Oil Price Volatility on Nigeria National Income and Nigeria Economy (Published)

Oil dependent nations have the potential of economic growth and development in a stable international oil price system. However, the effect of oil price volatility in the evaluation of Nigeria national income and economy is imperative in the face of Nigeria reliance on oil becoming a dream as the negative effect on budget implementation is clearly discovered by researchers. This study evaluated the effect of crude oil price volatility on Nigeria economy and the national income. The study adopted ex-post facto research design. The study covered a period of 22years from 1995 to 2017.  Descriptive and inferential (regression) statistics were adopted for the study. The result showed that oil price volatility has significant combined  effect on Nigeria’s economy (Gross Domestic Product, Gross National Product and Per Capital Income) Adj.R2 of 0.432;0.449 &0.478, F-Statistics of 7.858, 9.488 ,& 9.238 and p-value 0.004, 0.002 & 0.002.Oil price volatility has no significant negative  impact on Gross Domestic Product with β22 of -0.004,R2 of 0.023  t-statistics of -0.630 & p-value  of 0.537;oil price volatility has no significant  negative impact on Gross National Product with β22 of -0.005,R2of 0.027,t-statistics of -0.692 and p-value of 0.498;also oil price volatility has no significant negative impact on Per Capital Income with β22 of -0.004,R2 of 0.027,t-statistics of -0.688 & p-value of 0.500.The study concluded that oil price volatility affects national income and Nigeria economy significantly.  The study recommended that Nigeria should adopt policies that will address negative oil price shocks so that the budgetary system and national income will not be affected.

Keywords: Exchange Rate, Gross Domestic Product, National Income, Nigeria economy, gross national product, oil price volatility

Exchange Rate Reform and the Dynamics of Net-Export in Nigeria (Published)

In this paper, the short- and long-term empirical relationship between net-export and exchange rate variation in Nigeria was estimated using error correction model (ECM) and Fully-Modified least squares (FM-OLS) for the period, 1986-2017. The impacts of degree of openness and tariff on net-export were equally examined over the study period. Prior to the actual estimation of the model, the series were subjected to unit root test using Phillips-Perron method and the results that they are all first difference stationary. Additionally, the cointegration test result revealed that the linear combinations of the of the nonstationary series leads to long run relationship amongst them. The parsimonious ECM shows that the variables jointly exert significant impact on net-export in the short run. It was also observed from the error correction coefficient that any short run disequilibrium in the system can be reconciled at 53.47 percent to achieve long run equilibrium position. The estimated cointegrating regression model shows that nominal effective exchange rate exerts significant positive impact on net-export in the long run. Overall, the F-test result for joint significant of the series reveal that the all the variables are collectively important in influencing changes in net-export. On the basis of the findings, it is recommended that policy makers should ensure that exchange rate policy prevalent in the Nigeria economy is tailored towards making exports more competitive in the international market in order to boost net-export growth and maintain stability in the domestic economy.

Keywords: Degree of Openness, ECM and FM-OLS, Exchange Rate, Net-export, Tariff

Influence of Trade Liberalization on the Growth of Nigerian Economy: Autoregressive Distributed Lag Approach (Published)

This study examined the relationship between trade liberalization and economic growth proxied by gross domestic growth rate in Nigeria. The study specifically assessed whether there is a long run and short run causal relationship running from trade liberalization to economic growth in Nigeria. Trade liberalization was measured using trade openness, exchange rate, total import trade, total export trade and balance of trade. The data for the study were source from the CBN statistical bulletin for the period 1986 to 2014. The study used the Autoregressive Distributive Lag (ARDL) technique for data analysis. Findings from the analyses showed that trade liberalization has no long run causal relationship with gross domestic product growth rate in Nigeria. Also, trade openness and exchange rate have no short run causal relationship with gross domestic product growth rate in Nigeria. Lastly, total import trade, total export trade and balance of trade has short run causal relationship with gross domestic product growth rate in Nigeria. The study on the basis of these findings recommends the efficient use of total import trade, total export trade and balance of trade policy measures of trade liberalization in other to maximally benefit from trade liberalization.

Keywords: Exchange Rate, Gross Domestic Product, Trade Liberalization, trade openness

Monetary Policy and the Performance of Nigeria Capital Market: A Time Variant Analysis (Published)

This study examined the relationship between monetary policy and the performance of the Nigerian capital market using annual time series data sourced from the Central Bank of Nigeria Statistical Bulletin. The objective was to examine the long and short run relationship that exists between monetary policy variables and the performance of Nigerian capital market. Market capitalization and market turnover was modeled as the function of interest rate, exchange rate, monetary aggregates, monetary policy rate and treasury bill rate. The study applied the Ordinary Least Square (OLS) regression technique and causality, unit root, cointegration, vector error correction estimates. Findings revealed that interest rate, exchange rate monetary aggregate and monetary policy rate have positive and significant relationship with market capitalization but treasury bill rate have negative and significant relationship with market capitalization. Monetary policy rate, monetary aggregate and exchange rate have positive relationship with market turnover while Treasury bill rate and interest rate have negative and significant relationship with market turnover. The unit root test found the variables stationary at first difference, the cointergration test validates the presence of long run relationship, the granger causality test proved unidirectional causality while the vector error   correction estimates justified adequate speed of adjustment. The study concludes that monetary policy has significant relationship with performance of Nigeria capital market. We recommend that the monetary authorities should ensure effect monetary policy transmission mechanism that will enhance the performance of the capital market.

Keywords: Capital market, Exchange Rate, Monetary Policy, Time Series Monetary Policy Rate

Banking Sector Reforms and the Performance of Banking Business in Nigeria – An Econometric Analysis (Published)

The study examines the effect of financial reforms on banking sector efficiency in Nigeria from 1986- 2016. The objective of the study is to evaluate the extent to which exchange rate, (EXCH), interest rate (INT) and liquidity (LQT) have affected the efficiency of banking operations in Nigeria. The dependent variable in measuring banking sector efficiency is proxy by Nonperforming Loan (NPL). The OLS regression was adopted for test of the three hypotheses formulated. The findings indicate that financial reform targets have significantly affected banking sector efficiency in Nigeria in the long run. The study recommends that the regulatory and supervisory framework should be strengthened while interest rate policy should be made to stimulate savings through high real deposit rate and lending rate so as to promote financial deepening and thus banking efficiency.

Keywords: Banking Efficiency., Exchange Rate, Interest Rate, Liquidity, financial reforms

The Dynamics of Human Capital Development and Industrial Growth in Nigeria (Published)

This article is aimed at providing empirical evidence on the impact of human capital development on industrial growth in Nigeria. Time series data spanning 1976-2016 period on relevant variables were analyzed using both descriptive and econometric techniques. ADF procedures were used to test for stationarity of the variables. The results show that the variables moved towards equilibrium in the long-run. The results also show that recurrent expenditure on education and health has a negative impact on industrial growth. The goodness of fit was encouraging. This article asserts that rigorous pursuance of graduate skill acquisition programmes as well as adherence to the 26 per cent minimum budgetary allocation demanded by UNESCO for education which will spur improvement in human capital development will impact industrial growth positively. More-so, incentives such as tax holidays, pioneer reliefs and exemptions that aids increased investment in industrial growth be vigorously pursued by governments at all levels in Nigeria.

Keywords: Exchange Rate, Human Capital Development, Industrial Growth, Nigeria, expenditure on education, expenditure on health, gross capital formation

External Debt and Economic Growth: The Nigeria Experience (Published)

This research work was aimed at ascertaining the impact of external debt on economic growth in Nigeria. Ex-post facto research design was adopted for the study. While data on Gross Domestic Product (GDP), External Debt Stock and External Debt Service Payment were obtained from World Bank International Debt Statistics, Exchange Rate data were collected from Central Bank of Nigeria Statistical Bulletin, 2013. The period of study was 1980-2013. Model was formulated and data were analyzed using Ordinary Least Square. Diagnostic tests were conducted using Augmented Dick Fuller Unit Root Test, Co-integration and Error Correction Model. The independent variable was GDP, while the explanatory variables were External Debt Stock, External Debt Service Payment and Exchange Rate. We discovered that External Debt had a positive relationship with Gross Domestic Product at short run, but a negative relationship at long run. Also, while External Debt Service Payment had negative relationship with Gross Domestic Product, Exchange Rate had a positive relationship with it. The paper concluded that exchange rate fluctuation had positive impact on the Nigerian economy while external debt stock and debt service payment had negative impact on the same economy. The study recommended amongst others, that Debt Management Office should set mechanism in motion to ensure that loans were utilized for purposes for which they were acquired as well as set a ceiling for borrowing for states and federal governments based on well-defined criteria.

Keywords: Debt Stock, Exchange Rate, External Debt, External Debt Service Payment, Gross Domestic Product


The main purpose of this study is to ascertain the existence of a relationship between inflation and economic growth in Nigeria. The methodology employed in this study is the quantitative research design. Consumer price index (CPI) was used as a proxy for inflation and the GDP as proxy for economic growth, to examine the relationship. The scope of the study spanned from 2000 to 2009. Ordinary least square method and t-test was used to test the variables most likely to impact on economic growth in Nigeria due to inflation. The findings also shows that there is strong relationship between inflation and economic growth in Nigeria, that exchange rate has positive impact on economic growth and that high interest rate discourages investment and hence forestalls economic growth. It is therefore, recommended that the monetary policies aimed at exchange rate be strengthened through effective supervision and regulatory framework of financial system by the monetary framework of financial system by the monetary authorities. Continuous monetary policies that will achieve the desired macroeconomic stability, increase in private sector credits and there is also need fro more effective management of interest rate in Nigeria

Keywords: Economic Stability., Exchange Rate, Inflation Rate, Monetary Authorities, economic growth