The Dynamic Interactions Between Crude Oil Price, Exchange Rate and Inflation: Evidence from the Nigerian Economy

This research is conducted to investigate the dynamic relationship between crude oil price, exchange rate, and inflation in Nigeria: Evidence from Nigerian Economy, using annual data from 1980 to 2024 by applying Regressive model. The findings revealed that there is a positive relationship between crude oil price and exchange rate, but inflation is negatively related to exchange rate and crude oil price. It shows no long-run relationship between the variables. This implies that in the long run the variables do not affect each other in the Nigeria economy. Based on this, the paper concludes that in the short run crude oil price affects exchange rate positively and inflation is affected negatively by both crude oil price and exchange rate. Therefore, the study recommend that government should diversify the economy to attain exchange rate stability. Also, the monetary authority must focus on exchange rate movements by exchange rate interventions which stem inflation pressure from the external sector.