Abstract: This study was commissioned to investigate for long run and causal relationship between foreign investment inflows and exchange rate dynamics in Nigeria. Foreign capital is decomposed into foreign direct investment (FDI) and foreign portfolio investment (FPI) to enable us look at both the real and financial sectors of the economy. Results established that there exists a long run association between exchange rates dynamics and foreign capital inflows to Nigeria. This was evident by the values of bound test F-Statistic of 61.82058 and 33.18053 for foreign direct investment and foreign portfolio investment models respectively. The coefficients of error correction terms lagged one period in the short........
Keywords: Foreign investments, exchange rates, external debt sustainability, interest rates, Nigeria
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