Exchange rate is the price of one currency in terms of another currency.Exchange rate s This exchange rate is also used to determine the level of output growth of the country. Over the years, Nigeria has adopted various exchange rate regime ranging research work is centered on the impact of exchange rate on the Nigeria economic growth with special emphasis on the purchasing power of the average Nigeria and the level of international trade transaction. To do this, the classical linear regression model is applied and the ordinary least square econometric technique is also used to estimate the impact of exchange rate on economic growth. The variables used are GDP and non-oil export as the dependent variables, real exchange rates interest rates, inflation rate and degree of trade openness as the independent variables. Economic test shows the a priori criteria of the parameters used to determine if it conforms to the economic theory. The statistical criteria employed are the F test, T-test and R2 which test the significance of the parameters. The econometric (second order test) used are the Durbin Watson test, which test for autocorrelation and the randomness of the residuals. The Jarque-Bera criteria is used to test for normality of the residuals .the multicollinearity test which is used to test for a perfect linear relationship among the explanatory variables. From the analysis of the result, it shows that there is a relationship between GDP, EXPT and real exchange rate in Nigeria. Exchange rate stability has a positive and significant affection export and growth. An increase in exchange rate stability motivate firms to invest in export based industries.
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