EXCHANGE RATE FLUCTUATION AND FINANCIAL PERFORMANCE OF LISTED MANUFACTURING COMPANIES IN NIGERIA

Abstract

The havoc from continuous exchange rate fluctuation poses a sizeable threat to manufacturing companies especially those that utilize import-depended inputs in their production processes and consequentially affect their output and performance. Hence, this study evaluates the exchange rate fluctuation and financial performance of listed manufacturing companies in Nigeria. The study adopted a secondary source of data while descriptive statistics and regression analysis were used to analyze the data. The regression analysis result revealed that at a 5% (0.05) level of significance, all four proxies of exchange rate fluctuations are statistically significant to the financial performance of listed manufacturing companies in Nigeria. This led to the failure to accept any of the hypotheses raised to guide this study, with the conclusion that exchange rate fluctuation significantly affects the financial performance of listed manufacturing companies in Nigeria. Therefore, it was recommended that listed manufacturing companies should consider adopting robust foreign exchange risk management strategies ranging from hedging techniques, diversification of markets, and maintaining a clear understanding of their foreign exchange exposures.