ABSTRACT

The study investigated how exchange rate fluctuations affect Nigerian economy in the growth of its cross-border trading and international competitiveness for a period of thirty-seven years (1980- 2018). The study employed ordinary time series data to regress aggregate import, aggregate export, and exchange rate on trade balance, which was adopted for the study as proxy for Nigerian economic growth. The study adopted ordinary least square, unit root test of stationerity, error correction model, johansen co integration test and the pairwise granger causality test in carrying out the empirical analysis for the period under review. It was found that aggregate import (AIMP), aggregate export (AEXP), and exchange rate (EXCHR) had no positive significant change on trade balance during the period under review. The study recommended that the government should adopt an export promotion industrialization strategy, enact policies that will improve economic growth and provide infrastructure. The study concluded by suggesting areas of possible farther studies on: Effect of exchange rate pegging on economic growth, assessments on causal relationship between exchange rate volatility and export trading in Nigeria and Effect of monetary and fiscal policy tools on export trading in Nigeria.