EXAMINING THE RELATIONSHIP BETWEEN EXCHANGE RATE AND INFLATION IN NIGERIA

ABSTRACT

This study examines the relationship between exchange rate and inflation in Nigeria from 1980 to 2022. Using the Autoregressive Distributed Lag (ARDL) model, the result shows that there is no long run relationship between exchange rate and inflation in Nigeria. However, exchange rate has significant positive impact on inflation in Nigeria in the short run. In light of the findings, the study recommends that policymakers in Nigeria should implement policies aimed at stabilizing the exchange rate and reducing inflation to promote economic growth and stability.