Effect of Bureau De Change Establishment on the Stability of Exchange Rates in Nigeria

Abstract

The purpose of this study is to examine the effect of Bureau de change establishment on the stability of the exchange rate in Nigeria. Ex post-facto and correlation research designs are employed for this study. The sample relied on for the purpose of this work was for the period from 2008-2018. The study relies on secondary data sources such as books, journals, magazines, newspapers, internet, speeches, and document from CBN, NSE and Bureau for public enterprises. The data estimation technique used was ordinary least squares. The findings of the study revealed that the bureau de change establishment impact the stability of the exchange rate in Nigeria. The result indicated that is the long-run relationship between Bureau De change and stability of the exchange rate. The study recommended that participants in the foreign exchange market should undertake forward transactions to serve as an insurance cover (shield) for their spot transactions. The exchange rate of the bureau de change should be closely monitored by monetary authorities to reduce the gap between these rates and the official rates. The government should adopt measures that would bring down the exchange rate of the naira to a US dollar so that Nigerian producers who make use of imported raw materials can continue in business.

Keywords: Bureau De Change, Exchange Rate, Stability, Monetary, Naira.

DOI: 10.7176/EJBM/12-6-01

Publication date: February 29^th 2020