{"id":33,"date":"2023-06-29T19:33:35","date_gmt":"2023-06-29T19:33:35","guid":{"rendered":"https:\/\/enemconsulting.co\/Ourblog\/?p=33"},"modified":"2023-08-15T13:57:19","modified_gmt":"2023-08-15T13:57:19","slug":"the-impact-of-floating-the-naira-by-cbn","status":"publish","type":"post","link":"https:\/\/enemconsulting.co\/Ourblog\/2023\/06\/29\/the-impact-of-floating-the-naira-by-cbn\/","title":{"rendered":"THE IMPACT OF FLOATING THE NAIRA  BY CBN"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"300\" height=\"168\" src=\"https:\/\/enemconsulting.co\/Ourblog\/wp-content\/uploads\/2023\/08\/Unknown-18.jpeg\" alt=\"\" class=\"wp-image-324\"\/><\/figure>\n\n\n\n<p><br>1.\tExchange Rate Volatility: Floating the currency could lead to increased volatility in the exchange rate. Market forces would play a larger role in determining the Naira&#8217;s value, which could result in frequent fluctuations. This volatility could impact importers, exporters, and businesses involved in international trade.<br>2.\tInflationary Pressures: A floating currency may initially put upward pressure on inflation. If the value of the Naira depreciates significantly, imported goods would become more expensive, which could lead to higher prices for consumers. This can potentially erode purchasing power and affect the cost of living.<br>3.\tEnhanced Export Competitiveness: A weaker Naira resulting from the floating exchange rate will make Nigerian exports more competitive in international markets. This will stimulate export-oriented industries and contribute to economic growth by increasing foreign exchange earnings.<br>4.\tAttraction of Foreign Investment: A transparent and market-determined exchange rate system will improve confidence among foreign investors. The floating of the Naira will make Nigeria a more attractive investment destination by providing a clearer understanding of the currency&#8217;s value and enabling easier repatriation of funds.<br>5.\tReduced Parallel Market Activity: Floating the currency will reduce the reliance on the parallel (black) market for foreign exchange. When the official exchange rate is fixed or heavily controlled, a parallel market often emerges, leading to discrepancies in rates and potential illicit activities. A floating exchange rate system can help reduce such activities by providing a more transparent and accessible foreign exchange market.<br>6.\tImproved External Balance: A floating currency can facilitate adjustments in the external balance by allowing the Naira to find its market-clearing level. If the Naira is overvalued, a floating exchange rate would lead to depreciation, which can help correct trade imbalances by making imports relatively more expensive and exports more competitive.<br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>1. Exchange Rate Volatility: Floating the currency could lead to increased volatility in the exchange rate. Market forces<\/p>\n","protected":false},"author":3,"featured_media":324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-33","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/posts\/33","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/comments?post=33"}],"version-history":[{"count":3,"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/posts\/33\/revisions"}],"predecessor-version":[{"id":325,"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/posts\/33\/revisions\/325"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/media\/324"}],"wp:attachment":[{"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/media?parent=33"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/categories?post=33"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enemconsulting.co\/Ourblog\/wp-json\/wp\/v2\/tags?post=33"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}