“The Effect of Exchange Rate on Inflation, GDP, and Interest Rate, A Case Study of Central Bank of Nigeria:- Jobson Kingsley N

ABSTRACT

The main objective ofthe study is to verify the effect of exchange rate on inflation, GDP and interest rate in Nigeria from 1990 to 2012. Regression and Correlation analysis was used to verify the impact of exchange rate on inflation, GDP, interest rate and also ascertain their degree of relationship with each other. From the analysis done, we saw that there is a significant relationship between GDP and exchange rate as their correlation coefficient was 0.796 while there appeared to be a negative relationship between exchange rate with each of inflation and interest rate since their correlation coefficient was - 0.509 and -0.507 respectively. From the regression analysis, we saw that a unit change in inflation and interest rate are not significantly affected by change in exchange rate as the /?0 value were -0.1674 and -0.0238 respectively while there appeared to be a positive change in GDP for a unit change in exchange rate as the value was positive (i.e. 178609).