Abstract

The study is aimed at modeling the dynamics of exchange rate correlates in Nigeria using evidence from macroeconomic fundamentals and Autoregressive Distributed Lag (ARDL). The study further applied the ADF unit root test as methodology to analyze the stationarity properties of the series from 1999 to 2018. The result holds that the selected macroeconomic fundamentals; balance of payment, inflation rate, economic openness, external reserves, interest rate and public debt are correlates of exchange rate in the short and long run. The study therefore recommends that to stabilize the naira to compete with other foreign currencies, the Nigerian economy should encourage export base diversification of the real sector by providing loans and machineries to aid farmers, infant industries and manufacturers in the real sector of the economy.