AN ANALYSIS OF THE PROBLEMS OF FOREIGN EXCHANGE MANAGEMENT AND ITS IMPACT ON THE BANKING INDUSTRY
This study is aimed at analyzing the problems of foreign exchange management with a view to evaluating the belief of the public that the Central Bank of Nigeria was to blame for the foreign exchange problems and to examine if indeed there were other factors responsible for the frequent instability in the external value of the domestic currency – the Naira. Thus the focus on the Apex bank – The Central Bank of Nigeria. Management of nation’s foreign exchange resources is important to reduce the adverse effect of foreign exchange volatility. This is because of the strong allegation that the instability in the foreign exchange is from the poor management at the apex bank. Foreign exchange control act was looked into in the second chapter of the work. Foreign exchange is a process of converting a particular countries’ currency into that of another country and this is done in a foreign exchange market whose structure was looked at in the same chapter. The study however was analytical. Secondary data were collected and used for analysis and for testing, inferences made and conclusions arrived at based on observations made from the calculations on the collated data. The conclusive part of the work reveals that the instability experienced is attributed to the ineffective implementation of the regulatory policies of the CBN and the unwholesome practices by the operators. However, in order to arrest the dwindling fortunes of the naira and ensure the stability of the exchange rate, the operators of the economy have to look at the programs, policies which the scope of this work is not meant to cover. A further study on this is therefore recommended.