Our Archives

Call 08068929770 or 08122972656 for any enquiries.

Project Topic:

Foreign exchange risk management performance in Nigeria and its impact on banks (case studyOf GT bank 2010-2015)

Project Information:

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 60 ::   Attributes: Data Analysis ::   1,980 people found this useful

Project Body:

  1. Introduction

1.1 Background of the study

The catalyst that speeds up the growth and development of every nation’s economy is the nation’s bank. Initially the banking industry was focused on receipts of deposits from customers on demand. But today the banking system has grown beyond that range. The system now includes and embodies the performance of other extra functions which involves financial advisory services, foreign exchange transaction of both domestic and international payment systems. Focusing on foreign exchange, this is trading in foreign convertible currencies. It is a valuable thing earned through exports of goods and services and also the flow of foreign investments, external grants and loans. The transaction in foreign exchange drop under the treasury operations of every legal bank. In the treasury operation management, a sub-section of the unit is focused on treasury operations as a whole with a comprehensiverange of services beyond cash management in which foreign exchange is involved.

Foreign exchange risk is the risk related with the unforeseen changes in exchange rates and foreign exchange exposure as the extent to which unforeseen changes in exchange rates affect the value of a company’s assets. It has been proven thatforex related firms are often times victims to foreign exchange risk on the payables and receipts in foreign currencies. Evan et al (1985) also defined foreign exchange risk management as a program of assessment (identification and quantification) and counterstrategies to mitigate exchange rate risk and saves firm`s economic value. Kirt further added that foreign exchange risk is a financial risk to manage value creation and loss prevention in a firm by internal and external financial tools. This risk arises when fluctuation in the related values of currencies affects the competitive position of an organization. Organizations are opened to foreign exchange risk if the outcomes of their projects relies on future exchange rates and also if exchange rate changes cannot be fully foreseen. Generally, firms are opened to, Transaction exposure, Economic exposure and Translation exposure. Transaction risk is meant to occur where the value of the existing responsibilities are worsened by shifts in the foreign exchange rates. Transactional exposure begins to occur from future cash flows such as trade contracts and it also occurs where the value of existing responsibilities are affected by changes in foreign exchange rates. Economic risk is related to unfavorable impact on entity, income for both domestic and foreign operations because of sharp, unexpected change in exchange rate. Operational exposure happens when the market position of a firm changes due to the effect of exchange rate changes on competition, prices and demand.

Exactly the centerand main reason of treasury functions is to make sure that banks offer comprehensive range of quality services to improve the quality of customer relationship at every point in time. Being that treasury functions cover a wider area, the subject to series of flaws, weaknesses that may hamper its ability to achieve the primal goals cannot be disputed. In place of this view,foreign exchange risk management performance in Nigeria and its impact on banks cannot be swept under the carpet or ignored. In addition to this, the ability to take care of operation at an international level is extremely important to any major financial institution. The same is also true about the need for automating the production and delivery of treasury services. For treasury activities to be virtually and effectively carried out, it is a must that the computers, communication and artificial intelligence provide gateways to planning, execution and control. There is therefore need for comprehensive system of limit on all unmatched foreign exchange positions and for different kinds of currency portfolio in other to makethose potential losses from foreseeable exchanges rate are kept to a level that is allowed.

Previous research studies have provided a relationship between foreign exchange risk management, firm performance and banks. The study delves into how management risk involved in foreign exchange can affect banks.

1.2. Statement of the general problem

The current menace of forex crises has been a cause for serious concern. The increase in foreign exchange has led to the devaluation of our local currency, increase in the current economic hardship of Nigeria. Management foreign exchange in Nigeria has not been effective; this has been evident by the excessive fluctuations of other world currencies when compared with the Nair. The excessive fluctuations has led to the reduction of foreign direct investment as investors prefer to invest in neighboring countries which if it would have been in Nigeria would have created jobs for our unemployment youths.

1.3. Aims and objectives of the study

The major aim of this study is to examine the impact of foreign exchange risk management performance in Nigeria from 2010-2015 using the guaranty trust bank as a case study. Other specific objectives of the study include the following;

  1. To examine the level of foreign exchange risk management in Nigeria.
  2. To study the benefits of adequate foreign exchange risk management on the economy of Nigeria.
  3. To examine the relationship between foreign exchange management and economic development of Nigeria.
  4. To examine the relationship between foreign exchange risk management and bank profitability in Nigeria.
  5. To recommend ways of ensuring adequate management of foreign exchange risks in the banking sector.

1.4. Research Questions

  1. What is the impact of foreign exchange risk management performance on the banking sector in Nigeria?
  2. What is the level of foreign exchange risk management in Nigeria?
  3. What are the benefits of adequate foreign exchange risk management on the economy of Nigeria?
  4. What is the relationship between foreign exchange and economic development of Nigeria?
  5. What is the relationship between foreign exchange risk management and bank profitability in Nigeria?
  6. What are the ways of ensuring adequate management of foreign exchange risks in the banking sector?

 

1.5. Research Hypotheses

H0: Foreign exchange management does not have an effect on Nigerian banks.

H1:Foreign exchange management has an effect on Nigerian banks.

H0: There is no significant relationship between foreign exchange and the economy of Nigeria.

H1: There is a significant relationship between foreign exchange and the economy of Nigeria.

H0: There is no significant relationship between foreign exchange management and the profitability of commercial banks.

H1: There is a significant relationship between foreign exchange management and the profitability of commercial banks.

1.6. Significance of the study

This study would be of immense importance to the banking sector and the government of Nigeria at all levels in educating them on the need for adequate management of foreign exchange risks. The study would also benefit students, research and scholars who are interested in further studies on foreign exchange risk management in Nigeria.

1.7. Scope of the study

The study is on the impact of foreign exchange risk management performance on Nigerian banks from 2010 to 2015 using guaranty trust bank plc as the case study.

REFERENCES

Abor, J. (2005). Managing foreign exchange risk among Ghanaian firms. Journal of Risk Finance, 6 (4)),6-318.

Adler, C. & Dumas, F. (2010). Does Fuel Hedging Make Economic Sense? The Case of the US Airline Industry. Financial Management, 35, 53-86

Ahmad, H. K., Raza, A., Amjad, W. &Akram, M. (2011).Financial Performance of Finance Companies in Pakistan. Interdisciplinary Journal of Contemporary Research in Business , 2 (12), 732-744

Cassel G (1918).“Abnormal Deviations in International exchanges” Econ. J., 29: 492–496. Central Bank of Nigeria (1980).Annual Report and Statement of Accounts, Lagos.

Central Bank of Nigeria (1988) “The Foreign Exchange Market and its Management in Nigeria” CBN Briefs, No. 98/06, Lagos, pp.1–10. Central Bank of Nigeria (1998 – 2005 Editions). Statistical Bulletin.

Central Bank of Nigeria (1998). “Manage. Nigeria’s External Reserves” CBN Briefs, No 98/05, Lagos, pp. 1–7.


Get The Complete Project »

Project Department:

MORE BANKING AND FINANCE FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS

Instantly Share this Project On Social Media:

CLOSELY RELATED BANKING AND FINANCE FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS

A CRITICAL ANALYSIS ON THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 72 ::   Attributes: Questionnaire, Data Analysis  ::   3769 engagements

ABSTRACT This project work is carried out to examine the contribution of micro finance banks to the development of Small and medium scale enterprises in Nigeria. The Brass micro finance bank is used a...Continue reading »

A STUDY ON THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLES POLICY IN PORT HARCOURT, NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 76 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   2790 engagements

CHAPTER ONE INTRODUCTION 1.1. BACKGROUND TO THE STUDY One of the prerequisites for the development of national economy according to Ajayi et al, 2006 is by encouraging a payment system that is secu...Continue reading »

A STUDY ON THE IMPACT OF BUDGETARY CONTROLS ON THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIDELITY BANK PLC)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 80 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   3011 engagements

CHAPTER ONE INTRODUCTION 1.1. BACKGROUND OF THE STUDY AND PROFILE OF THE ORGANIZATION Following the uncertainties prevailing in the Nigerian business environment today, managers and stakeholders mu...Continue reading »

ANALYZING PERFORMANCE APPRAISAL TECHNIQUES IN UNION BANK NIG PLC

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 67 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   7312 engagements

CHAPTER ONE INTRODUCTION 1.1. BACKGROUND OF THE STUDY In any evaluation of the condition necessary for the growth and survival of an organization, the role of performance appraisal is a strategic f...Continue reading »

AUDIT INDEPENDENCE: ENHANCING ACCOUNTABILITY AND TRANSPARENCY IN CORPORATE ORGANIZATIONS

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 71 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   2429 engagements

CHAPTER ONE INTRODUCTION 1.1. Background of the study The subject of transparency and accountability in modern day corporate organizations has continued to receive attention as never before. It has b...Continue reading »

CREDIT MANAGEMENT AND ISSUES OF BAD DEBTS IN COMMERCIAL BANKS IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 68 ::   Attributes: Questionnaire, Data Analysis,Abstract

The article on this topic (credit management and issues of bad debts in commercial banks in Nigeria) is an extract from literature review of the project material. The complete project work would be ma...Continue reading »

What are you looking for today?

TESTIMONIALS:

  • 1. Mohammed A.B from Veterinary Laboratory, Zanzibar ,Tanzania said "You are doing good job to assists in research. God bless you.".
    Rating: Very Good
  • 2. Grace Madu from IMT enugu said "Thank you so much; i will tell my friends about you guys!!! Please give them a good job just like mine!!! God bless you!!!".
    Rating: Excellent
  • 3. Favour Adeoti from Unimaid said "For the good deeds and help to students like me, may God almighty continue to bless u and empower you to do more. Thank u very much...".
    Rating: Excellent
  • 4. Saddiq Abubakar Shuaibu from ESAE BENIN UNIVERSITY said "I check your site because I want you to help do this project thank you".
    Rating: Excellent
  • 5. Temitope Olumide from UAM makurdi said "I can not believe i could trust online platforms but you prove to me that there are still some good people out there. Thank you Mr Donald".
    Rating: Excellent
  • 6. Topeola Atinuke from the bells said "hmmmm, not sure yet about all dis comment still working on dem yet....tank u".
    Rating: Average

Paper Information

Format:ms word
Chapter:1-5
Pages:60
Attribute:Data Analysis
Price:₦3,000
Get The Complete Project »

Best Selling Projects

Our Archives