The Exchange Rate Management
Exchange Rate Policy in Nigeria
The main objectives of 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 82.33 to a dollar in 1995 appreciated to 81.48 per dollar in 1996. The rate depreciated continuously to 81.98, 84.84 and 91.83 in 1997, 1998 and 1999 respectively. The rates in the bureaux de change showed similar trend. At the bureaux de change, the rate closed at 83.69 to a dollar in 1995, appreciated to 83.15 per dollar in 1996 before depreciating continuously to 99.26 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.