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DiscussionsCategory: EconomicsHow are currency exchange rates determined?
Cliff ImasuenClassHall Admin Staff asked 8 months ago

This question has baffled me since my secondary school days.

I know that there was a time in Nigeria’s history when the naira was equal in value to the dollar. However, today, the value of the naira continues to depreciate against the dollar and other hard currencies. The effect of this trend cannot be overlooked, as it determines the prices of many consumer goods like electronics, cars, computers, phones, most of which are imported from other countries and paid for in dollars.

The exchange rate of the naira against the dollar fluctuates frequently, sometimes in favour of the naira and other times not so in its favour.

I have wondered for a long time what forces are behind the fluctuations, and if there are people who determine the value, perhaps through international monetary policies of some sort.


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