USER'S INSTRUCTIONS: The project work you are about to view is on "the management of foreign exchange risk and corporate performance in nigeria". Please, sit back and study the below research material carefully. This project topic "the management of foreign exchange risk and corporate performance in nigeria" have complete 5(five) Chapters. The complete Project Material/writeup include: Abstract + Introduction + etc + Literature Review + methodology + etc + Conclusion + Recommendation + References/Bibliography.Our aim of providing this "the management of foreign exchange risk and corporate performance in nigeria" project research material is to reduce the stress of moving from one school library to another all in the name of searching for "the management of foreign exchange risk and corporate performance in nigeria" research materials. We are not encouraging any form of plagiarism. This service is legal because, all institutions permit their students to read previous projects, books, articles or papers while developing their own works.

---

TITLE PAGE

THE MANAGEMENT OF FOREIGN EXCHANGE RISK AND CORPORATE PERFORMANCE IN NIGERIA

BY

---
EE/H2013/01430
DEPARTMENT OF ----
SCHOOL OF ---
INSTITUTE OF ---

DECEMBER,2018

---

APPROVAL PAGE

This is to certify that the research work, "the management of foreign exchange risk and corporate performance in nigeria" by ---, Reg. No. EE/H2007/01430 submitted in partial fulfillment of the requirement award of a Higher National Diploma on --- has been approved.

By
---                                                     . ---
Supervisor                                                  Head of Department.
Signature……………….                           Signature……………….        

……………………………….
---
External Invigilator

---

DEDICATION
This project is dedicated to Almighty God for his protection, kindness, strength over my life throughout the period and also to my --- for his financial support and moral care towards me.Also to my mentor --- for her academic advice she often gives to me. May Almighty God shield them from the peril of this world and bless their entire endeavour Amen.

---

ACKNOWLEDGEMENT

The successful completion of this project work could not have been a reality without the encouragement of my --- and other people. My immensely appreciation goes to my humble and able supervisor mr. --- for his kindness in supervising this project.
My warmest gratitude goes to my parents for their moral, spiritual and financial support throughout my study in this institution.
My appreciation goes to some of my lecturers among whom are Mr. ---, and Dr. ---. I also recognize the support of some of the staff of --- among whom are: The General Manager, Deputy General manager, the internal Auditor Mr. --- and the ---. Finally, my appreciation goes to my elder sister ---, my lovely friends mercy ---, ---, --- and many others who were quite helpful.

---

PROJECT DESCRIPTION: This work "the management of foreign exchange risk and corporate performance in nigeria" research material is a complete and well researched project material strictly for academic purposes, which has been approved by different Lecturers from different higher institutions. We made Preliminary pages, Abstract and Chapter one of "the management of foreign exchange risk and corporate performance in nigeria" visible for everyone, then the complete material on "the management of foreign exchange risk and corporate performance in nigeria" is to be ordered for. Happy viewing!!!

---

TABLE OF CONTENTS
Title Page
Certification
Dedication
Acknowledgement
Contents
CHAPTER ONE

1. Introduction
1. Background of the Study
2. Statement of the Study
3. Justification of the Study
4. Objective of the Study
5. Research Questions
6. Statement of Hypothesis
7. Scope and Limitation of the Study

1. Organization of the study
2. Definition of terms                                                                

CHAPTER TWO

1. introduction Literature review
2. The foreign exchange rate
3. The foreign exchange risk.
4. The foreign risk management.

2.5    Foreign exchange market.
2.6    National monetary policies $ exchange rate.
2.7    Exchange rate determination.
2.71  The balance payment approach.
2.7.2           Purchasing power party (ppp).
2.8    The Nigerian economy – am1 over view.
2.8.1 Structure of the foreign exchange market
2.8.2 The auction and the inter – bank market.
2.8.3    The bureaux de change.
2.8.4    Pricing methodology and exchange rate moments.
2.9    Government policies on foreign exchange.
2.9.1 Policy strategies
2.9.2 Historical briefing of united bank for Africa plc.
CHAPTER THREE

1. Research methodology introduction
2. Research Design
3. Type and sources of data
4. Sample size of the study
5. Sampling technique
6. Instrumentation
7. Method of data analysis.

CHAPTER FOUR

1. Data Presentation Analysis & Interpretation, Introduction
2. Data Analysis
3. Restatement of Research Hypothesis
1. Testing of Research Hypothesis
4. Impact of Exchange Rate and Control
5. Observed Responses for Hypothesis
6. Foreign Exchange Policy

CHAPTER FIVE

1. Summary of Findings
2. Conclusion.
3. Research recommendation
4. Limitation of the study
5. Suggestion for future studies
6. References

CHAPTER ONE
1.0    INTRODUCTION
BACKGROUND OF THE STUDY
International trade and capital flow require a Foreign exchange market because, despite increased economic interdependence in the world, each country maintain it’s own National medium of exchange the official foreign exchange market in Nigeria is made up to the federal ministry of finance and the central bank of Nigeria as the apex institution, authorized dealers including commercial and merchant bank, development banks and bureau de exchange control policies and procedures while the banking system armed bureau de exchange serve as channels for implementing official policy. Operating side by side with the official foreign exchange market is the parallel or black market (Agene 1991).
Since 1985, the central bank of Nigeria (C.B.N) has attempt to enviable an optional exchange rate for the local currency at the same time sought to achieve a system that preferentially allocates the available foreign exchange to the productive sectors, that is agriculture and manufacturing.
It has been reluctant to allow the inter-play of the forces of demand and supply to determine of exchange rate and allocation of scarce foreign exchange resources. They consequently has being maintained of huge subsidy on the official foreign exchange .this subsidy combine with the private bidding system has created severe pressure on the domestic money market, as over N35 billion is subsidized foreign exchange in 1985.however, against the background that foreign exchange market (FEM) was faced with problem, the federal government of Nigeria (FGN) took two economic measure with more favorable exchange rate for foreign currencies in terms of naira, holder of hard foreign currencies would repatriate them back into Nigeria to benefit from the favorable  rates now operating which earlier was possible only through black market rate. This official channels are more to benefit from a net inflow of funds hold by Nigerians abroad. The external value of the naira is a fundamental value and one established, all other value in the economy would take their correct shape and deduce distortions are divergence from optimists once corrected, optional allocation resources would be advised.

THE FOREIGN EXCHANGE RATE
Exchange rate are functions of international economic activities. It is the quantitative expression of a country’s currency in term of two naira, fifty kobo (Adidlanye 1984).
Thus, foreign exchange rate is the rate of exchange on foreign currencies or simply the price of one country ‘s quoted in terms of another. That is the rate of exchange in London is the price here in dollars of a pound sterling draft the basic rate of exchange is generally quoted as the price of a cable transfer. It is argued that will adequate downward adjustment of exchange rates, countries with balance of payments difficulties would be able to export more, less and save some foreign exchange of declaring the national economic emergency.
In October 1985 an adopted structural adjustment programme (SAP) in July 1986.tthe programme gave birth the second tier foreign exchange market (SFEM), this legislation exchange regime in Nigeria since independence in terms of the dismantling of the restrictions and bureaucracies which plagued previous regime (Agene 1991).
Structural adjustment programme (SAP) refers to a set of comprehensive economic reform measure designed to correct in balance in the economic arising from unfavorable external factors as ell as inappropriate domestic policies. The objectives of (SAP) was to effectively restructured the criminate price distortions and heavy foreign exchange earner and import of consumption and produced goods. The major thrust or structural adjustment programmes (SAP) include the following:

1. Achieve fiscal and balance of payment viable over the period.
2. Restructuring and diversify the productive base of the economy in other to reduce dependency on a single major foreign exchange earner and importer.
3. Lay the basic for a sustainable non –inflationary economic growth.
4. Lesson the dominance of unproductive investment in the public sector efficiency and encourage the growth potentials of the private sector.

The over –valued naira led to a flight of capital, it thus aided that naira was converted to harder currencies at rates that decided to give more value to the naira than it was worth now in the regime of foreign market (FEM) and banking business carried on in Nigeria in

1949 by the British and the French bank limited, and has a legendary and enviable pedigree as the bank for wise man and woman with strong representative in the corporate and wholesales market. UBA also has a large and established retail franchise and two foreign branches in New York and grand Cayman Island.
UBA Group is known for its initiative and creativity. Some of the key milestone in it’s history includes ;

1. First among international to be registered under Nigeria laws.
2. First Nigeria bank to offer it’s share to the public following it’s listing on the  Nigerian stock exchange in 1970.
3.  First Nigeria bank to introduce a cheque guarantees scheme known as UBA CARD in 1986.
4. Won the Euro money 2000 award for excellence, as the best domestic bank in Nigeria.
5. First Nigeria bank / company to gain recognition of the

international financial community through the establishment of Global depository receipt (GOR) programme.

1. Consistent and solid financial performance over the past year.

           THE FOREIGN EXCHANGE RISK
Risk can been seen as unforeseen contingency. It is the chance that the actual return on an investment will be different from its expected return. Exchange risk is the effect that unanticipated exchange rate changes have on the value of the firm loan and thus, it is simply in concept a potential gain or loss that occur as result of an exchange. for example, if an individual owns a share in the Hitachi, the Japanese company he or she will lose if the value of the yen drops.

FOREIGN EXCHANGE RISK MANAGEMENT
Many firms retrain from active management of their foreign exchange exposure, even through they understand that exchange fluctuations can affect their earnings and value.
(Jan and Gonter 2003) one of the reasons for taking this decision is that management tools, such as forwards futures and options as speculative. Perhaps they are right to fear a bosses of hedging techniques, but refusing to use forward and other instrument s may expose the firm o substantial speculative risk.
THE FOREIGN EXCHANGE MARKET
The foreign exchange market for any currency is made up of all financial centres in the world were the currency is traded for the currencies. Both individuals and firms buy and sell foreign currencies from banks and brokers in these financial centre abroad (odizi 1994). The financial centres of the world with their foreign exchange markets are closely linked together by means of modern telecommunication facilities.
According to agene (1991), the official foreign exchange market in Nigeria is made up of the central Bank of Nigeria and the federal ministry of finance as the apex institution authorized dealers including commercial and merchant banks, development bank and the bureau die change.

NATIONAL MONETARY POLICIES AND EXCHANGE RATE
The monetary policies followed in different countries can be grouped by the rates targets followed by their central bank authorities in determine the rates target (odizi, 1994). Some countries have persuade dependent monetary policies change in their domestic money supplies are geared to changes in their central bank holdings of international moneys. The domestic money supply increase when the central bank purchase foreign exchange from exports by issuing more domestic monetary liabilities, its domestic monetary liabilities decline when importers money, the constant as
long as its holding of international money are constant.

EXCHANGE RATE DETERMINATION
If market participants constantly contrast the options of holding an exchange position in a given currency with the option of covering it, then in equilibrium the returns from the options should be similar. If exchange position remains open, its returns is equal to the interest rate earned in the currency plus the percentage changes in the spot rate during the holding period. If the position is covered the return is equal to the interest rate in the currency plus the forward premium or discount on the currency.

THE NIGERIAN ECONOMY – AN OVERVIEW
The foreign exchange market (FEM) became an institution Nigeria following protracted economic declines. The 1970’s were generally regarded as an era of Oil boom in Nigeria, when oil revenue enhanced economic development the economy become heavily dependent on crude petroleum exports as the main source of foreign exchange earnings and the government revenue (NEEkop, 1992). According to the CBN international operation (2003) the increased exports of crude oil in the early 70’s following he sharp rise  in its prices enhanced official foreign exchange receipts. The Larger inflow of oil money encouraged large scale importation of consumer and producer by 1980’s and in the process became a major food importer.

GOVERNMENT POLICIES OF FOREIGN EXCHANGE
A number of policy instrument were adopted at the inception of (SAP) and in the process of programme implementation to attain their objectives one of the inception for boosting export receipt and diversity the export base was the abolition of the commodity boards and the export licensing more people to export.
However companies which failed to repatriate export process as required are penalized through cart ailment of their use of other foreign exchange facilities some institutional facilities were introduced to support the export drive – ages of the newly established National Maritime Authority based on a 40-40-20 formula
allowing Nigeria vessel of life 40% of the value of trade while trading partners and third party vessels to lift 40% and 20% respectively.

HISTORICAL BRZEFING OF UNITED BANK FOR AFRICA PLC
The consolidated United Bank for Africa plc, is the product of a merger of Nigeria’s third and fifth largest banks.
U.B.A and standard trust Bank plc respectively and continental Trust Bank. The union is the first successful merger transaction in the history of the Nigerian banking sector and was born out of a desire to lead the sector to a new era of global relevance by championing the creation of the Nigerian consumer finance market
and lending a private/public sector partnership aimed at accelerating the economic development of Nigeria.
The old UBA had been one of the three largest banks that have historically dominated the banking industry in Nigeria, along side first bank plc and union bank plc and were owned by a board spectrum of local and international private and institutional investors including Banque Nationa delavoro and monte pasehi di seba

1.1    BACKGROUND OF THE STUDY
          International Trade and capital flows required a foreign exchange market because despite increased economic interdependence in the world, each country maintains its own national medium of exchange the official foreign exchange market in Nigeria is made up to the federal ministry of finance and the centre Bank of Nigeria as the Apex institution authorized dealers including commercial and merchant bank, development banks and bureau de change. The federal ministry of finance and the central Bank of Nigeria are jointly responsible for the formulation of exchange control policies and procedures while the banking system and bureau de change serve as channels  for implementing official policy. Operating side by side with the official foreign exchange market is the parallel or “Black market (Agene, 1991).
Since 1985, the central bank of Nigeria (CBN) has attempted to evolve an optional exchange rate for local currency at the same time sought to achieve a system that preferentially allocates the available foreign exchange to the productive sectors that is agriculture and manufacturing. It has been reluctant to allow the inter-play of forces of demand & supply to determine of exchange rate and allocation of scarce foreign exchange resources. They consequently has been maintain of huge subsidy on the domestic official foreign exchange, this subsidy combined with the private biding system has created severe pressure on the domestic money market, as over N35 billion is subsidized foreign exchange in 1955. However, against the background that foreign” exchange market (FEM) was faced with problem, the federal government of Nigeria (FGN) took two economic measure of declaring  the national economic emergency in October 1985 and adopted structural Adjustment Programme (SAP) in July 1986. The programme gave birth the second tier foreign Exchange market (SFEM), this legislation exchange regime in Nigeria since independence in terms of the dismantling of the restrictions and bureaucracies which plagued previous regime (Ayene, 1991).
Structural adjustment programme (SAP) refers  to a set of comprehensive economic reform measure designed to correct imbalance in the economy arising from unfavourable external factors as well as in appropriate domestic policies. The objectives of (SAP) was to effectively restructure the consumption and production pattern of the Nigeria economy to eliminate price distortions and heary foreign exchange earner and imports of consumption and producer goods. The major thrust of structural Adjustment programme (SAP) includes the followings:
Allocation resources would be achieved.

1. 2 STATEMENT OF THE PROBLEM

The bretton woods conference (1944) established a fixed exchanged rate system where by each currency had a fixed parity (value) in relation to the dollar. In Nigeria, the manufacturing or better still corporate sector depended heavily on imported raw materials, machineries, spare parts and services however foreign exchange did not pose any problem then simply because of the exchange rate.
However, with deregulation of the foreign exchange market, this has resulted in high foreign exchange rate. Research in the past have neglected some specific issues that are capable of up-setting the whole economic system, one such issue and to which this research will address in the impact of foreign exchange policy on the Nigeria corporate sector depend on foreign input for their production.

1. 3 JUSTIFICATION OF THE STUDY

Monetary authorities, authorized dealers in the foreign
exchange market, market analysts, and professionals in both the private sectors of the nations economy agree that effective foreign exchange management serve the need to promote a given pattern of development, protect local industries prevent

1. Achieve fiscal and balance of payment viable over the period.
2. Restructuring and diversify the productive base of the economy in order to reduce dependence on a single major foreign exchange earner and imports.
3. Lay the basic for a sustainable non-inflationary economic growth.
4. Lesson the dominance of unproductive investment in the public sector, efficiency and encourage the growth potentials of the private sector.

The over-valued naira led to a flight of capital, it thus aided that naira was converted to harder currencies at rates that tended to give more value to the naira than it worth. Now in the regime of foreign  market (FEM) and with more favourable exchange rate for foreign currencies would repatriate them back into Nigeria to benefit from the favourable rates now operating which earlier was possible only through black market rates, thus official channels are more to benefit from a net inflow of founds held by Nigerians abroad. The external value of naira is a fundamental value and one established, all other value in the economy since distortion are divergence from optimality once corrected, optional capital flight, promote insurance and stimulate re insurance transactions (Obisesan, 2002)
The importance of foreign  exchange management to economic growth development and welfare cannot be over emphasized, as such a proper research work has been carried on the Nigeria foreign exchange market.
The importance of foreign exchange market (FEM) and corporation performance in Nigeria is to checkmate the foreign exchanged malpractices. This achievement is as follows:
To provide the mechanism for dealing in foreign exchange at market determined rates and ultiustely achieved simple equilibrium rates for naira.
Another is to enable Nigeria complete effectively with the financial centre for funds to finance industrial growth and development. To attract inflow of capital especially funds held abroad by Nigeria, to eliminate the illegal traffics in currency and commodity across the country’s boarders, to achieve the convertibility of the naira and even the optimal allocation of resources.

1. 4 OBJECTIVES OF THE STUDY

This research work focused on the risk associated with fluctuation in foreign exchange rates and its effect on the
performance of corporate organization in Nigeria.
The specific objectives of the study are as follows;

1. To examine the risk fluctuation in exchange rates and control associated with currency management in a multi-currency settings.
2. To investigate on the policies one government and corporation organization have and how effective this policies have been.
3.  To appraise the impact of the policy tools on the growth and development of the nations economy.
4. To  prefer recommendation based on the research findings.'
5. 
   
1. 5 RESEARCH QUESTIONS
6. Does the various exchange policies help your organization in it’s corporate performance?
7. Does fluctuation in the foreign exchange rate affect your net income?
8. Does profitability of your organization depends on the difference between the naira and the other major current?
9. Do you feel the impact of competition in the faces of those developments.
10. Does your unit cost fluctuate
    
    
1. 6 STATEMENT OF HYPOTHESIS

Based on the research  questions and objectives of the study, the following hypothesis stated  will be tested.
Hypothesis 1
H0 – Change in exchange rate and control have on dramatic impact on profitability.
H1 – Changes in exchange rate and control have dramatic impact on profitability.

 

1.7           HYPOTHESIS 2
H0 – Variation in holding of currency is not determine by the manager
H1 – Fluctuating exchange rate control is not determined by the manager.
HYPOTHESIS 3
H0 – Fluctuating exchange rate control does not associate with management of currency in multi-currency setting.
H1 – Fluctuating exchange rate control associate with management of currency in multi-currency setting.

1. 8 SCOPE AND LIMITATION OF THE STUDY

It is essentially important important on state that the study focused on the general appraisal of the foreign exchange policy in Nigeria as this involve an assessment of how the objective have been realized and the attendants respect of the policy.
The research will be in historical and case-study research which may be limited by insufficient finance, lack of enough time, lack of co-operation from the respondent and the case study. This may hinder thorough research.
However, efforts will be made to ensure that the above constraints and limitations do not affect the effective completion of the research work. The time frame and resource of the study.
Our study will only cover a selected number of corporate organizations with high off-shore  activities ranging between the year 1986 – 2005.

1. 9 ORGANIZATION

The organization of the right from chapter one comprises the introduction which is sub-divided into eight sub-sections as follows: back ground of the study statement of the problem, justification of the study objective of the study statement of research questions,
statement of hypothesis and scope of the study. While chapter two dealt with the literature review. The third chapter deal with research methodology and the forth chapter deals with Data Analysis and presentation while the last chapter comprises of the summery conclusion  and recommendation.

1. 10 DEFINITION OF THE TERMS

Exchange Control: a mechanism by which a country scalesite harness it’s foreign exchange resources and rationalization for the settlement international indebtedness while ensuring their same favourable development of domestic economic activities without diminishing the value of it’s currency (Nwa ractie 1982).

Exchange Rate: the limit price of a currency in terms of currency of another country.

---

CHAPTER TWO: The chapter one of this work has been displayed above. The complete chapter two of "the management of foreign exchange risk and corporate performance in nigeria" is also available. Order full work to download. Chapter two of "the management of foreign exchange risk and corporate performance in nigeria" consists of the literature review. In this chapter all the related work on "the management of foreign exchange risk and corporate performance in nigeria" was reviewed.

CHAPTER THREE: The complete chapter three of "the management of foreign exchange risk and corporate performance in nigeria" is available. Order full work to download. Chapter three of "the management of foreign exchange risk and corporate performance in nigeria" consists of the methodology. In this chapter all the method used in carrying out this work was discussed.

CHAPTER FOUR: The complete chapter four of "the management of foreign exchange risk and corporate performance in nigeria" is available. Order full work to download. Chapter four of "the management of foreign exchange risk and corporate performance in nigeria" consists of all the test conducted during the work and the result gotten after the whole work

CHAPTER FIVE: The complete chapter five of design and construction of a "the management of foreign exchange risk and corporate performance in nigeria" is available. Order full work to download. Chapter five of "the management of foreign exchange risk and corporate performance in nigeria" consist of conclusion, recommendation and references.

 

---

To "DOWNLOAD" the complete material on this particular topic above click "HERE"

Do you want our Bank Accounts? please click HERE

To view other related topics click HERE

To "SUMMIT" new topic(s), develop a new topic OR you did not see your topic on our site but want to confirm the availiability of your topic click HERE

Do you want us to research your new topic? if yes, click "HERE"

Do you have any question concerning our post/services? click HERE for answers to your questions

---

For more information contact us through any of the following means:

Mobile No :+2348146561114 or +2347015391124 [Mr. Innocent]

Email address :engr4project@gmail.com

Watsapp No :+2348146561114

---

COUNTRIES THAT FOUND OUR SERVICES USEFUL

Australia, Botswana, Canada, Europe, Ghana, Ireland, India, Kenya, Liberia, Malaysia, Namibia, New Zealand, Nigeria, Pakistan, Philippines, Singapore, Sierra Leone, South Africa, Uganda, United States, United Kindom, Zambia, Zimbabwe, etc
Support: +234 8146561114 or +2347015391124

Watsapp No :+2348146561114

Email Address :engr4project@gmail.com

---

FOLLOW / VISIT US VIA: