IMPACTS OF EXCHANGE RATE MECHANISMS ON FIRST BANK OF NIGERIA PLC,
IMPACTS OF EXCHANGE RATE MECHANISMS ON FIRST BANK OF NIGERIA PLC,
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Date
1998-10
Authors
T E R Y I MA, U G B A N T I M O T H Y
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Abstract
ABSTRACT
The international monetary system operated under an
institutional framework known as "fix exchange rates' during the
1950s and 1960s which borke down in the early 1970s and the world
economy has since then been operated under a system of "floating
exchange rates', in which most major currencies have been allowed to
fluctuate in response to a variety of forces, whether commercial or
speculative in the international currency markets.
In Nigeria, the objective for the establishment of the Foreig
Exchange Market in September, 1986 was to evolve a realistic market
determined exchange rate for the naira so as to remove the naira
over Valuation, reduce the pressure on the balance of payments to
stop further accumulation of trade debt, reduce imports, stimulate
exports and pave way for self reliant and sustainable growth.
Exchange rate mechanisms depends on a complicated interaction
of factors including: inflation, the balance of payments, interest
rates, Political/Strategic uncertainties, etc. However, in
practical terms, what determines the external value of the domestic
currency is the foreign exchange earnings and expenditures of a
country. Since exchange rates are directly linked to domestric
prices, the banks activities because they have effect on the
monetary situation, have some bearing on exchange rate mechanisms
and indeed on the broad functioning of the economy, in the sense ;es are employed and the
behaviour of price levels. Thus in many respects, the frequent
upheavals in the Foreign Exchange Market (FEM) is a painful but
unaviodable manifestation of Governments "fight' to address the
endemic vice of inflation.
Nevertheless, because the entire economy is intergrated,
exchange rate Policy induced measures always turn to have some far
reaching implications on the performance of commercial banks in
Description
BEING A PROJECT SUBMITTED TO THE DEPARTMENT OF BUSINESS
ADMINISTRATION AHMADU BELLO UNIVERSITY (ABU) ZARIA IN PARTIAL
FULFILLMENT FOR THE AWARD OF MASTER OF BUSINESS ADMINISTRATION
(M.S.A.) DEGREE
Keywords
IMPACTS,, EXCHANGE,, RATE,, MECHANISMS,, FIRST,, BANKING,, NIGERIA.