Exchange Rate Unification Policy, The Implication for the Value of Naira

Exchange rate is critical to the growth and development of the Nigerian economy. Thus, good and intended policies are needed to achieved strong value of the Nigerian naira in the international market. In lieu of the above, this paper examines Nigeria’s 2023 exchange rate unification reforms and their implications for the value of the naira. The Central Bank of Nigeria (CBN) unified multiple exchange rate windows into a market-based Investors’ and Exporters’ window in June 2023, later introducing Electronic FX Matching (2024) and updated market codes (2025). Using theoretical lenses, demand–supply frameworks, inflation targeting and empirical evidence, the paper finds that, unification prompted immediate depreciation of the naira, accelerated inflation, and increased exchange rate volatility. However, it also improved monetary policy transmission, fiscal transparency, and the potential for foreign direct investment. Cross-country experiences confirm that sustained benefits depend on credible monetary and fiscal anchors. The study recommends stronger macroeconomic coordination, targeted social protection, and institutional reforms to stabilize the naira and realize long-run efficiency gains.