Currency Float in Nigeria and Ethiopia

SOURCE www.npr.org
Nigerian and Ethiopian governments have decided to float their currencies, which could have significant impacts on their economies.

Key Points

  • Floating currencies can help countries adjust to market forces
  • It allows the currency value to be determined by supply and demand
  • Could lead to more efficient allocation of resources

Pros

  • Can potentially attract foreign investment
  • May help stabilize the economy in the long term

Cons

  • Could lead to short-term volatility in the currency value
  • May increase inflation initially