INTRODUCTION
Exchange rate
is the rate at which two national currencies exchange for each other (Lipsey
& Crystal, 1995). It determines the relative prices of domestic and foreign
goods, as well as the Strength of external sector participation in the
international trade (Dornbusch et al, 2005).
Foreign exchange rates are among the most important
prices in international monetary markets
(Rahim et al, 2018). Exchange rate plays an
important role in the broad allocation of production resources and spending in
the domestic economy between foreign and domestic goods and as well as
influences export growth, consumption, resource allocation, employment and
private investments (Takaendesa, Isheole and Aziakponcjfp 2005).it determines
the relative prices of domestic and foreign goods, as well as the strength of
external sectors participation in the international trade (Dumbusch et al,2005)
Thus, Nigeria as a very large market in foreign trade operates an open economy
with other countries of the world with the use of foreign currencies.
Foreign/international trade is a trade that cuts international boundary of the
world and involves the use of foreign currencies. It is also the trade between
two or more countries that makes it becomes possible to exchange the currency
of one to another (Udoka and Ubom 2003).
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