The currency of a nation is made to appreciate. Is this appreciation made at the expense of the foreign market determinant? Or is it as a result of the country’s effort?
It is the aim of this research work to find out if Nigeria apply foreign exchange rate controls, is naira appreciation what we attain to achieve. This research work has five chapters.
Chapter one contains a general discussion of the foreign exchange rate fluctuation as seen by different people. It went further to state the problem to be studied and why this study was carried out, the scope and limitation of the study and finally the propositions and the definition of terms.
A number of past related literature examined by other studies as it relates to the fluctuation of exchange rate on naira, are highlighted in chapter two.
Chapter three deals with the design of the study, the methods used in collecting relevant data. It also deals with ways the questionnaires were carried out and treatment of data.
The data gotten from the research survey were presented and analyzed in chapter four.
Finally, the summary of findings, conclusion on the research and recommendations made by the researcher are all in chapter five.
If the Nigeria would put the recommendations made in the study to use, there will be currency steady appreciation with controls applied. Then, the negative effect on our currency by the fluctuating foreign exchange rate will become a thing of the past.
1.1 BACKGROUND OF THE STUDY
The inter-bank market in foreign exchange is used for trading in foreign currencies – main vehicle for generating autonomous inflow of foreign exchange into the banking system. La licensed banks, development banks and the central bank are active traders the market. These banks intermediate for their corporate and individual customers that engage in international trade and investment. The are always prepared to buy form or sell foreign currencies to their customers in both the spot and forward markets. In addition, authorized dealers open and maintain foreign currency domiciliary accounts for their customers, especially the exporting customers.
Exchange rates ruling in the inter-bank market fluctuate in response to the forces of supply and demand for foreign currencies, subject to a maximum spread of one percent between the buying and selling