THE IMPACT OF EXCHANG RATE FLUCTUATION IN INTERNATIONAL TRADE IN NIGERIA.
CHAPTER ONE
AN OVERVIEW OF THE STUDY
In the early 1960s inNigeria, there was little concern. For exchange rata policy, as it had almost on significance in economic management between 1960 and 1967, theNigeriacurrency was adjusted in relation to the British pound with one to one relationship between them. Between 1967 and 1974, another fixed parity was maintained with the American dollar. The system was abandoned between 1974 and late 1976 when an independent exchange rate management policy was ushered in that pagged the naira to either the U. S. dollar or the british pound sterling which ever currency was stronger in the foreiga exchange market. Because of the huge earnings from crude petroleum exports over the period,Nigeriapersistently cans appreciable externel surpluses in the balance of payments, which supported the appreciation of the naira. This practice ied to considerable stability in the naira exchange rate.
Late in 1976 as aresult of the changing fortunes ofNigeriaseconomic circumstances a policy reversal was effected in the management of the naira exchange rate. There was a deliberate depreciation of the naira, thought thiswas notsystematic. In an effort to realign the naira exchange rate the monefarists were convinced that a more appropriate way to ensure stability on the naira was to peg it to a basket of currencies. Hence a basket of seven currencies of Nigerians major trading partner
