BENEFITS OF NEW NAIRA FLOAT ON NIGERIA ECONOMY
The depreciation of the Naira is only one of the many problems that have plagued the Nigerian economy in recent years. A new Naira float policy was implemented by the Central Bank of Nigeria (CBN) in 2019, which has had far-reaching effects on the country’s economy. In this paper, I’ll discuss how the floating of the Naira has helped the Nigerian economy.
The currency rate has been stabilized, which is a key benefit of the new Naira float. The new policy was implemented because the exchange rate had been extremely unstable, with regular changes that made it difficult for firms to plan and invest. Since the new policy was implemented, however, the currency rate has been more stable, which has increased investor confidence and drawn in more international investment.
The strain on the foreign exchange market has been eased thanks to the new Naira float, which is another positive side effect. The foreign exchange market was under significant pressure before the policy was implemented because of the increased demand for foreign cash. Demand for foreign currency has fallen since the new policy was implemented, relieving some of the stress on the market and lessening the possibility of currency speculation.
Additionally, the new Naira float has aided in increasing openness and responsibility in the forex market. Corruption and manipulation charges in the foreign exchange market hampered investor trust and economic activity before the regulation was implemented. Investor confidence has been restored, and economic development has been bolstered, thanks in large part to the new policy’s increased openness and accountability in the market.
A more stable currency rate, lessened pressure on the foreign exchange market, and increased openness and accountability are only some of the positive effects of the new Naira float policy on the Nigerian economy. Although the Nigerian economy still faces difficulties, the new policy has made it easier for firms and investors to thrive, which is encouraging for the country’s future.