The purpose of this research was to determine if and how the Nigerian economys development is related to the countrys exchange rate. The Statistical Bulletin of the Central Bank of Nigeria (CBN) and the United Nations Conference on Trade and Development (UNCTAD) were mined for annual data covering the years 1981 to 2021. Foreign exchange rate was measured using the official naira/dollar exchange rate, and real GDP was utilised as an indicator of economic growth. Toda and Yamamotos non-granger causality test was used to examine the relationship between the value of the dollar and economic expansion. No causal relationship between the exchange rate and economic expansion was found in the empirical data. This may be because of how the Nigerian economy is set up, which is predicated on the export of crude oil. The research demonstrated a one-way causation between FDI and the currency exchange rate. Expansion in the economy was found to granger induce expansion in the financial sector, lending credence to the demand-following concept. The report concludes that increasing exports and stabilising the value of the naira may be achieved via diversifying the Nigerian economy away from its reliance on crude oil.