This study examines the effect of exchange rate on the performance of manufacturing industry between 1985 and 2022. The study proxied of exchange rate by real exchange rate, external reserve and trade openness while the performance of manufacturing industry was measured by manufacturing sector GDP. The theories adopted comprise: Purchasing Power Parity (PPP), Theory, Optimal Currency Area (OCA) Theory and Theory of Production. Annual temporal data for the study were sourced from Central Bank of Nigeria (CBN) statistical bulletin and Word Development Indicators (WDI) of the Word Bank. The techniques of data analysis adopted are unit root test, co-integration test and error correction model (ECM) approach. The study found that real exchange rate has a substantial unfavourable effect on manufacturing sector GDP in Nigeria, external reserve has a favourable and substantial effect on manufacturing sector GDP in Nigeria while trade openness has a favourable and substantial effect on manufacturing sector GDP in Nigeria. As per the finding, the study concluded that exchange rate plays a substantial role influencing the performance of manufacturing industry in Nigeria. The study recommended that government should formulate efficient and feasible trade policies that will liberalize trade and open the Nigerian manufacturing sector to foreign investors.