ABSTRACT 

The data for this work is a secondary data. It was c Defected from Federal Office of Statistics Port Harcourt. The data is an official Exchange rate of the naira to the U.S dollar (1987-1998). It is a quarterly data of twelve years. The method used in analyzing this work is Time Series. it is used here because the record of events were taken at equal intervals of time. The data is ordered with respect to time and successive observations are usually not independent We use multiplicative and additive models here. The main aim of this work is to fine a mathematical model which is suitable for a reliable forecast of exchange rate of naira to the US dollar. Problems encountered in this work is in the several. trips made to and from FOS P.H in the collection of the data and in editing of the collected data to prove the correctness of the original data. Also there were problems in research work ci' finding other information that prove the original one valid. More so, there were problems in computation of several data and in plotting of graph. From our result, it was observed that the Naira per Dollar exchange rate is always almost on the increase. The fourth quarters are observed to have the least values while second quarters have the highest values. This is vividly seen from our forecasted value in table 4.0. Among the four components of time series namely, trend, seasonal, cyclic and Irregular components, the seasonal component is the one the has the least influence on the pattern of exchange rate. in figure 4, we observed that the seasonal indices has not much remarkable variation. Also in figure 6 which is the graph of depersonalized data, one noticed that the shape is not very much different from the graph of original data in figure 1. The cyclic and Irregular variations have the greatest influence on the exchange rate this can be observed by comparing the graph of figure 1 & figure 7, 3, and 9. Generally, the study explains the worsening condition in Nigeria economy. We recommend that care should be taken to reduce; the shortage of foreign exchange to inter- bank foreign exchange market. The activities of the foreign exchange market should adequately be regulated.