EFFECT OF EXCHANGE RATE FLUCTUATION ON IMPORTED GOODS IN NIGERIA
The major aim of this research work is to know the effects of exchange rate fluctuation on imported goods in Nigeria. It is also aimed at ascertaining the level of relationship between the depreciation value of Naira and the pricing of imported goods in Nigeria. The fluctuating nature of exchange rate appears to be responsible for the exploitative pricing of imported goods in Nigeria. The objective of researcher is to address the following to know the reason of this upward movement of the pricing of goods in Nigeria. To discover only Nigeria dependable on importation to X – ray why then is steady rise in the price of imported goods these issues were addressed through theoretical and empirical approach within help of secondary and primary data collection method, related literature were reviewed to ascertain what various authors have to say on the topic. The primary data was collected through questionnaire administered on the financial institutions importers and retailers of various imported goods in Lagos metropolis. The question is upward movement of the pricing of goods in Nigeria due to the exchange rate fluctuation. The researcher found out that the upward movement of the pricing of goods in Nigeria is due to exchange rate fluctuation. The researcher made the following recommendation, government should work tirelessly with its monetary agencies to fix the rate of Naira, for no country of the world leaves its currency afloat to the pros and cons of forces of demand and supply.
1.1 BACKGROUND OF THE STUDY
The Nigeria economy has witnessed a great degree of instability ever since the end of Civil War. From 2.48824 to 1.24414 grains of fine gold following the exchange of the Nigerian Pound to Naira in 1973, fixed exchange rates were establish for both Pound sterling and the US Dollar at £0.5833 and US 1.5200 respectively to N1.00 this has caused havoc to the Nigerian economy in that exchange rate the Naira to both Dollar and Pound sterling has been observed that the economy has it also been witnessed the highest degree of inflation. The result is that Nigeria as a country has last it’s financial credibility in the outside world at the home front because the exchange rate is net to our favour the country has witnessed the greatest degree of brain drain.
The exchange rate fluctuations has effected most our industries that import whole or part of their raw materials and the result is that production is below capacity utilization, resulting in unemployment. Again, because of the exchange rate, most local home made goods are expensive thereby pricing themselves out of the market.