This study examines the implications of exchange rate gaps on key macroeconomic indicators in Nigeria, focusing on foreign exchange reserves, GDP growth rates, and the current account balance. Using empirical analysis over a time series framework from 1980 to 2022, the study implements linear and non-linear ARDL methodologies. Findings indicate that exchange rate gaps significantly negatively impact Nigeria's foreign exchange reserves, GDP growth, and current account balance. Policy recommendations include infrastructure investment, sectoral diversification, and sound monetary policies to mitigate inflationary pressures exacerbated by exchange rate volatility.