THE IMPACT OF EXCHANGE RATE FLUCTUATIONS ON INTERNATIONAL TRADE TRANSACTIONS IN NIGERIA BETWEEN [1980 – 2008]

ABSTRACT

The method used in the collection of data for this research include information gotten from the responses of the questionnaires distributed. Also there were secondary data which are from books and magazines. There was analysis of the table involved. At the end of the study, some of the finding include that actually a remittance lag actually exists in the Nigerian financial system and that the fluctuating exchange rate has an effect on the country’s balance of trade.

The recommendation include that external borrowing by, Nigeria should be in different currencies so as to offset exchange rate risks.

There was also a recommendation that there should be the establishment of official help to reduce the variability and increase the incentives on exchange rates. In conclusion it was adjusted that Nigeria as a developing country and economy needs to grow and come out of the menace of chronic balance of payment disequilibrium which is one of the causes of inflation. This could only be achieved when there is adequate management of international trade and payment.

CHAPTER ONE

1.1 INTRODUCTION

The process of globalization which is in vague is the rapid integration of trade relation productive and investment decisions across the globe by economic agents who employ and move investment capital and technology around to take advantage of environments where their competitive edge can manifest in high returns.

This process which came about with Marshall plan for Europe after the second world war has greatly expanded trade and economic contact between nations. The mass movement of commodities often over great distance have raised the standard of living world wide. International trade has made available a greater amount and a greater variety of goods for consumption. International trade has gone hand with technological improvements in production and with development of transportation, obviously this advanced in volume and variety of goods produced and traded. Factories turn out quantities of commodities large and small, which are not consumed locally but are promptly distributed to different parts of the word.

Virtually improvements in transportation and the expansion of world markets have made possible this large scale of economic production. The world is now a ‘global village ‘ because of the continuous flaw of goods in and out of nations and the dependence by every nations upon foreign sources for variety of goods, which are of special importance. These nation economics, financial and cultural activities have boundries. Trade between nations was formerly carried out by private individuals, however in recent times government has increasingly engaged in international trade transactions directly with each other on the basis of governmental decisions.

1.2        STATEMENT OF PROBLEM

International trade involves the movement of goods and services between two countries. Payment for such goods and services are however made in an agreed currency between the exporter and the importer. And because exchange rate are variant the before the researcher is therefore to determines who bears the burden of the incidence of the exchange rate fluctuation. More so, since the exporter /importer cannot source the foreign exchange if not through the financial institutions. The researcher therefore finds it imperative to investigate the rote played by the institutions in the exchange rate fluctuation vis-à-vis the newly introduced Dutch auction by the central bank of Nigeria. Furthermore, the world community is a global village linked together by communications. The various exchange rate in the international markers are usually influence by the economically viable and strong economies of the world. The inter play of the economic powers of the varying strong economic attracted the curiosity of the researcher to investigate the impact of the world economic powers on the international trade vis-à-vis balances of payment and of trade. As we go about our daily lives, it is easy to over look the importance trade. American ships enormous volumes of food, air planes computer, and machinery to other countries; and in return we get vast quantities of oil foot wear, car, coffee, and other goods and services. While American pride themselves on their ingenuity it is sobering to reflect how many of our products-including gunpowder, classical music, clocks, railroads, penicillin and radar, arose from the ingenuity of long-forgotten people in faraway places.

What are the economic forces that lie behind international trade? Simply put, trade promotes specialization, and specialization increases productivity. Over the long run, increased trade and higher productivity......

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Item Type: Project Material  |  Size: 92 pages  |  Chapters: 1-5

Format: MS Word  |  Delivery: Within 30Mins.

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