Overview

The speech provides an overview of Nigeria's exchange rate mechanism, tracing its evolution from fixed regimes in the 1960s to managed float since the Structural Adjustment Programme (SAP) in 1986. It highlights the adverse effects of fixed rates, including naira overvaluation, import dependency, balance of payments issues, and external reserve depletion. The speaker emphasizes the importance of a realistic exchange rate for economic competitiveness, non-oil exports, and foreign direct investment. The document details various exchange rate regimes globally (e.g., fixed, floating, managed float) and discusses the role of monetary policy in stabilizing the naira. The speech also notes that these changes are not unique to Nigeria, referencing the US dollar's shift from gold parity in 1971.

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