IMPACT OF FOREIGN EXCHANGE RATE ON GROSS DOMESTIC PRODUCT IN NIGERIA

📄 Project Abstract

Foreign exchange markets exist because nations want to maintain their sovereign right and identities as nations, by administering and controlling their own currencies. There would have been no foreign exchange market if all countries of the world had and transacted with a single currency. Hence, Ickes (2006) opines that foreign exchange markets exist because economies employ national currencies. The need for foreign exchange initially emanated from international trade which requires settlement in currencies that are legal tender in the countries of both the importer and the exporter (RMB, 2012). As Rime (2003) observes, prior to the advent of telecommunications technology, trading in foreign exchange could be described as a centralized call market. According to him, trading in foreign exchange can be traced back to ancient times when foreign exchange trading was a way to circumvent the ban on usury. King, et al; (2011) assert that it would be hard to overstate the importance of foreign...