ABSTRACT

 The study evaluated the effect of exchange rate policies on exchange rate determination in Nigeria spanning from 1981 to 2018. The objective of the study were to examine the effect of exchange rale policies on Real Gross Domestic Product in Nigeria and to investigate the long run relationship between exchange rate policies and Real Gross Domestic Product in Nigeria. The study employed Ordinary Least Square and the Johansen co-integration test, thus, revealed that; inflation rate has a negative and significant impact on real gross domestic in Nigeria, exchange rate has a negative and significant impact on real gross domestic in Nigeria, money supply has a positive and significant impact on real gross domestic in Nigeria, interest rate has a negative but insignificant impact on real gross domestic in Nigeria and there exist a long run relationship between exchange rate policy and real gross domestic product in Nigeria. Based on thefinding, the study recommended that; government should review its policies on money supply and pay more attention to its determinants, invest more on its resources in the provision of infrastructure which will increase output, reduce inflation, interest rate and exchange rate fluctuations. They are essential ingredientsfor boosting real gross domestic in Nigeria.Monetary authorities should also find ways ofdetermining the rate at which interest should be maintained to encourage borrowingfor investment purposes and exchange rate policies should consider the necessity ofprice and interest rate stability