This study focused on responsiveness of flexible foreign exchange regime to economic growth in Nigeria. Specifically the study sought to; (1) investigate the relationship between flexible exchange regime and interest rate. (2) Determine whether flexible exchange regime responds positively to inflation rate (3) ascertain the level of association between flexible exchange regime and real exchange rate in Nigeria. The researchers adopted time series data from 1989 -2015 which were drawn from Central Bank of Nigeria (CBN) statistical bulletin. The analysis of data was done using descriptive statistical and ordinary least square (OLS) regression technique. The result shows that there is significant and positive relationship between flexible exchange rate regime and interest rate. The study further reveals that there is a negative and significant relationship between flexible foreign exchange regime, Inflation rate and real exchange rate. The study therefore recommended that CBN and Government should ensure significant improvement in the allocation efficiency of foreign exchange market and enhance public confidence in the Nigerian Economy.
Flexible Foreign Exchange Regime, Inflation Rate, Interest Rate, Real Exchange Rate and OLS
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