This study investigates the relationship between the exchange rate and industrial sector performance. Data were obtained from sources from 1986 to 2024. It employed Kwiatkowski-Phiilips-Schmidt-Shin Ordinary Least Squares, Augmented Dickey Fuller, and the unit root test to analyze the data. The Industrial Sector Performance, being the Independent Variable, was affected by the monetary policy rate, exchange rate, and inflation. The study’s theoretical framework was anchored by the optimal currency area and purchasing power parity theories. The causality test proved that exchange asymmetry, monetary policy rate, and inflation do not influence Nigeria’s industrial sector performance. However, the modified analysis using ordinary least squares revealed that the rate of exchange instability has a favorable but negligible impact on industry performance. Similarly, monetary policy has a negative and insignificant effect, whereas inflation has an adverse and substantial impact on industrial performance. The study concluded that unpredictability in currency rates does not explain the variation in Nigeria’s industrial sector performance. However, it advised, among others, that strict and regulated foreign exchange rate measures be pursued to pave the way for industries to increase performance and boost economic growth.
Davis Ojima (2026) studied this question.