An Econometric Evaluation of the Variation effect of the Nigerian Rate of Exchange on the Economic Progression

This research work investigated an econometric evaluation of the variation effect of the Nigerian rate of exchange on the economic progression between the years 1986-2017. A secondary source of data was employed in this work, which was extracted from the National Bureau Statistical Bulletin published by the Central Bank of Nigeria. Maximum Likelihood estimation of the R-software was carried out to evaluate the parameter estimate of the multiple regression coefficients and analyzed the influence of the explanatory variables (Gross Domestic Product, Unemployment and Inflation on the rate of Exchange). It was observed that the Gross Domestic Product and Unemployment rate influenced negatively on the Exchange rate but significant with (β = -1.646, t = -2.409, sig.val = 0.0228) and (β = - 0.8602, t = -3.302, sig.val = 0.00263) respectively. Nevertheless Inflation rate had positive influence on the rate of Exchange but not significant with (β = 1.311, t = 0.852, sig.val = 0.40122). The Coefficient of determination (R2 = 82.7) implies that the variation of the Nigerian rate of exchange has significant effect on the economic progression between the years 1986-2017. However, the paper recommends the following; a control of the sequential rising of inflation so as to have a stabilized rate of exchange and a promising economy for the citizens, adequate security, effective fiscal and monetary policies, as well as the provision of infrastructural facilities so that foreign investors will be attracted to invest in Nigeria.