The Impact of Exchange Rate Fluctuations On Economic Growth in Nigeria

CHAPTER ONE INTRODUCTION 1.0 BACKGROUND OF THE STUDY Nigeria aims to become one of the leading developed economies in the world by the year 2050 (Obi et al, 2016). A crucial strategy towardsobtaining this aspirationis the development of a well-structured exchange rate policy. Exchange rate refers to the amount units of aeconomy’s currency (the home country) when it comes to another economy’s currency. It is the recommended number of denominations of a currency that can purchase one or more units of another country’s currency. Hence, exchange rate is bestexplained as the value of one currency in respect of another (Mordi 2006). Ngerebo–a and Ibe (2013) define exchange rate as the portion of a unit of one medium of exchange to the unit of another medium of exchange at a specific time. It decides the general cost of homegrown and externalmerchandise, including the quality of foreign sector involvement in global trade. Hossain (2002) states that the exchange rate assist to link the value structure of two dissimilarnations by providing a global platform for trade, which directly influences the magnitude of imports and exports, and a nation’s balance of payment positions.