Abstract
The direction of flow is not certain in which variations in the exchange rate could be transmitted to the consumer price index. To examine the transmission mechanism arising from the exchange rate to consumer price index in the Nigerian economy, eight variables-VAR model was employed in this regard. The data for the study span from the period first quarter of 2009 to the fourth quarter of 2021. The results had it that exchange rate devaluation is transmitted directly to consumer price index through a rise in the net exports and also the aggregate demand. The study therefore, recommends a rise in terms of outputs in local production so that the weight of the inflationary impact of the exchange rate devaluation could be minimal.
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