DE-DOLLARIZATION AND EXCHANGE RATE UNIFICATION AND THE IMPLICATIONS FOR FINANCIAL TRANSACTIONS IN NIGERIA

ABSTRACT

This study presents a comprehensive overview of the critical issues surrounding dedollarization and exchange rate unification in Nigeria and their profound implications for financial transactions in the country. Nigeria, a significant player in the global economy, has historically faced challenges related to dual exchange rates, a reliance on the US dollar, and a fragmented financial landscape. The recent efforts by the Central Bank of Nigeria (CBN) to address these issues through de-dollarization and exchange rate unification mark a significant turning point for the nation's economic landscape. Key areas such as exchange rate, Monetary Policy implementation, foreign direct investment, and international trade were studied. The study focused on staff of the university of Benin, precisely from the faculty of management and social sciences, and staff of Central Bank of Nigeria (CBN), Benin City, Edo State that are grounded on the subject matter. Primary data was collected through questionnaires administered to 50 top personnel’s from the sample and a survey research design was employed. Data analysis involved descriptive statistics, and multiple regression models using the Eviews version ten (10) software. The research revealed a positive association between exchange rate, foreign direct investment, monetary policy, international trade and de-dollarization. As a result the study recommends that the government should adopt progressive exchange rate policies that can encourage the use of the domestic currency for transactions. Also, strengthening the domestic financial sector through comprehensive Financial Sector reforms can also play a vital role in boosting confidence in the local currency. This research contributes to a broader understanding of the implications of these policies for Nigeria's economic future and its role in the global financial system.