The Nigerian Foreign Exchange Market; Rate Determination; Control and Prospects for Naira Convertibility

In a free-market system houses and businesses use the market to exchange currency and goods.

The discussion of a single currency for West African Countries has been going on for over a decade now. The countries of West Africa are working towards achieving monetary and currency integration by introducing a common currency called “Ecoi” throughout the West African Monetary Zone (WAMZ) (“Common currency for West Africa”, 2017). Therefore, I will be discussing the disadvantages of the integration of currencies in West African Countries and explaining why the integration of currencies in West Africa is a bad thing.

“Economists define government intervention in the foreign exchange market as the buying or selling of foreign exchange for the purpose of manipulating the exchange rate. “(Case, pg. 398)

Forex Forex, an acronym for Foreign Exchange is an over-the-counter (OTC) market and is the largest financial market, the world has invented so far. Forex market is a mechanism by which currencies are exchanged according to each currencies value depending on various macro-economic factors. Its volume amounts to the value of New York Stock Exchange, with a daily average of $20 billion. Forex trading is done in currency pairs by which one currency is bought or sold for another in anticipation of gain or loss in value against another. An example of a currency pair is shown using notation- EUR/USD or USD/JPY.

Once this is accomplished, the drug dealers are out of the picture.  Now it is up to the currency broker to launder the funds he now hold in foreign countries.  He now must place these funds into the country's banking system and move it around.  For this process, he has contacts in the foreign countries to assist him[ ibid

As a result, all the profits earned by the Chinese exporters are to be hand over to Chinese government. This also result to restriction of flow of RMB out of China as we know that China is the second largest economy in the world that many transactions are occurred daily between China and other foreign countries. Thus, it is important to restrict the large amount of RMB flowing outside of China. Other than that, the Chinese government has launch a gradual policy of developing the transaction in the RMB as China want to find a way to prohibit people who desire to get the RMB being freely traded. Thus, Chinese government choose to develop this policy through its onshore offshore market, Hong Kong. In Hong Kong, they have their own currency named Hong Kong dollar (HKD), being floating against the global currencies. However, through the policy adopted by Chinese government, Hong Kong’s people are able to hold RMB in either cash or in bank deposits, and their maximum daily transfer are just RMB 20,000. There is also limited trading in Hong Kong. The main purpose China do this policy is because of avoiding RMB flowing out of China but at the same time let the

Current account balances necessitate a one-way offsetting capital flow of equal magnitude to prevent exchange rate fluctuations. Capital flows are, however, not homogenous. Consequently, the financial media often falls into the trap of solely stressing the perceived power of interest rate differentials in driving capital flows and, therefore, exchange rates. The reality is, however, that the role of "hot money" flows between banking centres is much over-hyped in exchange rate determination, particularly during periods devoid of financial stress.

Introduction: The remote trade showcase (forex, FX, or coin market) is a worldwide decentralized market for the exchanging of monetary forms. This incorporates all parts of purchasing, offering and trading monetary forms at present or decided costs. As far as volume of exchanging, it is by a long shot the biggest market in the world.

The forex exchange market can be best defined as a global market that is decentralized and one where trading of various world currencies take place. The trading literally captures all aspects of exchanging, buying and selling currencies at certain determined rates. The rates or prices are usually current. The forex market is

When two sorts of cash are exchanged for each other that is known as currency pair. One can exchange about any sort of money against almost whatever other kind, gave somebody in the Forex market has it accessible. For instance, one can exchange US dollars versus Japanese yen, or Euros

In the spot foreign exchange markets, there are several broad areas of potential abuse, which may occur on a stand-alone basis or in combination:

After multiple attempts, I succeeded in making contact with the Special Assistant to the Executive Vice Chairman of the Nigerian Communications commission, Mr Edoyemi Ogoh. However, he seemed quite busy, and could not give me much time, but we were able to have a brief discussion on the factors, from the regulatory point of view, impacting the growth of mobile money in Nigeria. He was of the opinion that the bank-led model for providing mobile financial services in Nigeria, as opposed to the operator-led model could be

Foreign Exchange & foreign currency is the elastic link between various independent political states. The Central Bank of a country frames the monetary policy to maintain a desirable Foreign exchange rate & regulate the flow of foreign currency in an economy.

 In such type of market, parties are involved in trading of currency. In a foreign exchange market (also called currency market), one party exchanges one country’s currency with equivalent quantity of another currency.

Today, its vital role in commercial banking activities lie in the direct effect it has on total economic growth and business development. Every year the (CBN) central bank of Nigeria being the monetary authority that is solely responsible for the insurance of guidelines policies and the interpretation of such, comes up with economic measure roles and regulation under which the bank in the country operate. Such policies direct the use of funds from depositors, stockholders, and creditors in order to control the size of loan portfolio thereby determining the general circumstances under which it is appropriate to make an advance. The monetary policies also aim at aiding the banks to maintain a sound financial and banking system promote confidence in sustenance of reasonable banking services for public as well as ensuring a high standard of conduct and professionalism in banking industry. These rules and regulations are contained in monetary policy circular being issued by the central bank at the beginning of every year.