The Exchange Rate Management

FX Structure | FX Mgt Before Now. | FX Mkt | Debt Conversion | Exchange Rate Policy | Movement in Reserves | International Payments | Reserve Management

Exchange Rate Policy in Nigeria

The main objectives of the exchange rate policy in Nigeria are to preserve the value of the domestic currency, maintain a favourable external reserves position, and ensure external balance without compromising the need for internal balance and the overall goal of macroeconomic stability.

Exchange Rate Movement

The average AFEM intervention rate which closed at N82.33 to a dollar in 1995 appreciated to N81.48 per dollar in 1996. The rate depreciated continuously to N81.98, N84.84, and N91.83 in 1997, 1998 and 1999, respectively. The rates in the Bureaux de Change (BDC) showed a similar trend. At the Bureaux de Change, the rate closed at N83.69 to a dollar in 1995, appreciated to N83.15 per dollar in 1996 before depreciating continuously to N99.26 per dollar in 1999. The parallel market premium moved from 1.6 per cent in 1996 to 3.2 per cent in 1999. Meanwhile, the market-determined exchange rate at the IFEM has remained within the pre-determined fluctuation bands. Between 1999 and 2004 the average IFEM rate depreciated from N99.26 per dollar to N134.67 per dollar. There was an appreciation of 9.43 per cent between 2004 and 2009 when the rate closed at N134.67 and N123.06 per dollar, respectively. However, the average BDC rate between 2004 and 2009 moved from N140.85 to N161.64, representing 14.76 per cent. From 2010 to 2015 the exchange rate moved from 151.09 to 195.52 per dollar, representing a 9.93 per cent decrease while the BDC rate moved from 153.07 to 222.78, representing 12.00 per cent depreciation. Furthermore, exchange rate moved from N253.50 to N358.81 per dollar between 2016 and 2020 representing a 41.54 per cent depreciation while the BDC rate in the same period moved from N372.86 to N433.70 per dollar. The rate further depreciated by 66.45 per cent, moving from N381.00, N454.06, and N634.16 per dollar in 2021, 2022, and 2023, respectively. In the same period, the naira moved from N477.82 to N878.85 naira per dollar, representing 83.93 per cent depreciation.