Exchange Rate Management Policies Options Towards Strengthening the Naira for Economic Transformation

Abstract

Close to two decades, the Nigerian Naira has witnessed tremendous fall in its value against major currencies in the global market, giving rise to fast climbing inflation rate and its attendant consequences. Effort by various governments at federal and state levels to remedy the Naira and ensure its stability have shown no signs of fruitfulness. The Central Bank of Nigeria (CBN), at different times, has adopted several measures in this regard including currency devaluation, stringent monetary and fiscal policies, Naira redesign, and the newest, being the effort to collapse into one, the parallel exchange market. These measures, from all indications, were unable to stem the tide of the Naira fall. This study, therefore, adopts a narrative review of economic and finance literature to suggest policy options that could redeem the Naira and strengthens its exchange value in the global market. Inputs from scholarly literature were sought and reviewed around issues such as the working mechanisms of the foreign exchange market, continuous demand and consumption of foreign made goods, and short- and long-term monetary policies. The measures to restore the value of the Naira were then suggested in the paper. Keywords: Exchange rate; Naira fall; Currency Devaluation; Monetary Policy; CBN