This project work investigated the effect of exchange rate fluctuations on Nigeria balance of payment. Secondary data was used in this work and was sourced from the international monetary fund and World Bank and Ordinary least squares were used in estimating this work. The empirical finding of this work was that there is a significant relationship between exchange rate and balance of payment in Nigeria using the Wald test. However, the T-test shows that exchange rate was significant at levels and at 2nd lag and has a positive and negative relationship with the dependent variable (balance of payment) respectively. In conclusion, the researcher recommended that the monetary authority (CBN) should formulate policies that will regulate the fluctuations in foreign exchange market in order to create surplus in Nigeria’s balance of payment.
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