IMPACT OF CBN FOREIGN EXCHANGE UNIFICATION ON STANDARD OF LIVING

Unifying the naira’s exchange rate has been a hot subject in Nigeria ever since the Central Bank of Nigeria (CBN) made the announcement. Since this change affects the cost of living in Nigeria, it will likely have far-reaching consequences on the living standards of the country’s population. To that end, I intend to analyze how the Central Bank of Nigeria’s decision to unify its foreign currency rates has affected the quality of life there.

First, the cost of imported items is anticipated to decrease as a result of the unified exchange rate. This is so because the unified naira exchange rate will make it simpler for companies to import items at a reduced cost, regardless of where they’re located. This, in turn, will cause prices to drop, raising the living conditions of ordinary Nigerians.

Second, we anticipate that the unification of the currency rate will attract more international investment. This is because the transparency around the naira’s exchange rate would encourage more foreign investment in Nigeria. As a result, the economy of Nigeria will expand, creating more jobs, and the living conditions of its citizens would improve.

Thirdly, the illegal market for foreign exchange is predicted to shrink as a result of the unified exchange rate. Since the naira’s exchange rate would be standardized throughout all markets, it will be harder for individuals to participate in fraudulent FX trades. Because of this, corruption would decrease and transparency will rise, boosting Nigerians’ level of living.

CBN foreign exchange unification may have positive effects on the level of life in Nigeria, but it may also have negative effects. For instance, inflation and a decline in buying power for Nigerians may result from a unified exchange rate that causes a devaluation of the naira. There is also concern that unifying the currency rate might reduce corporate competitiveness in Nigeria, resulting in fewer jobs and slower economic growth.

Foreign exchange unification at the CBN has had a wide-ranging and nuanced effect on the quality of life in Nigeria. There may be some good results, but there may also be some bad results that should be taken into account. The effectiveness of this strategy hinges on how it is carried out and received by the people of Nigeria.