Abstract

<p>The study empirically examined the effect of foreign exchange on the performance of the Nigeria economy. The specific objectives were to; examine the effect of money supply, inflation rate, trade openness on the performance of Nigeria economy. The study employed ex-post facto research. In line with the main focus of this study, secondary sources of data were used. Ordinary least square of multiple regression technique was adopted to establish the effect of independent on dependent variable. Based on the results, the findings showed that exchange rate, money supply, Inflation and trade openness (TO) had significant effect on the performance of the Nigerian economy, while exchange rate and money supply had a negative effect on the performance of Nigeria economy. The study concluded that exchange rate plays a key role in international economic transactions because no nation can remain in isolation. The study recommended thus: In order to address the negative impact of exchange rate on the economy, there is need forlocal sourcing of raw materials and input through agriculture and technological policy. By so doing, it will lead to expansion of export base which would attract more foreign exchange into the country. Furthermore, the monetary authority should introduce direct policies of regulating price stability in the economy via regulating money supply in order to decelerate the rising inflationary trend in the economy.</p>