This study examined the impact of exchange rate and depreciation on household consumption expenditure in Nigeria from 1986 to 2024. Using household expenditure growth as the dependent variable, the study incorporated real exchange rate, import growth, interest rate, and real GDP per capita as explanatory variables. The study employed the Vector Autoregressive (VAR) model, supported by Impulse Response Functions (IRFs) and Variance Decomposition (VD), to analyse the dynamic relationships among the variables. The findings revealed that exchange rate depreciation exerts a significant negative effect on household consumption in Nigeria (EXR(-1) = -0.001648; t = -2.276, p < 0.05). In contrast, import growth (IMP(-1) = 0.171908; t = 2.140) and GDP per capita (RGDP =

0.046999; t = 2.530) positively influenced consumer spending, while interest rate showed no significant effect. Impulse response analysis indicated that exchange rate shocks depress household consumption up to the fifth period, while variance decomposition showed that exchange rate shocks accounted for 19.56% of forecast error variance in consumption by the tenth period. The study concludes that exchange rate depreciation weakens household purchasing power and consumer spending in Nigeria. It recommends exchange rate stabilization policies, import substitution strategies, and measures aimed at improving household income and macroeconomic stability.