On Friday June 17, 2016, the Central Bank of Nigeria (CBN) abandoned the Nigerian naira’s (NGN or N) fixed exchange rate and allowed the currency to float. Previously fixed against the U.S. dollar at NGN196.50 = USD1.00, the naira closed at NGN279.50 = USD1.00 on Monday June 20, the first day of trading following the float. The naira quickly quickly floated (sunk) to NGN324.50 = USD1.00 by August 18. Similarly, the naira fell from NGN221.2001 = EUR1.00 to NGN316.7294 on June 20 and NGN347.7721 = EUR1.00 on August 18.

a. What was the percentage change in the value of the Nigerian naira versus the dollar the first trading day?

b. What was the percentage change in the value of the naira versus the dollar by August 18, 2016?

c. What was the percentage change in the value of the Nigerian naira verus the euro the first trading day?

d. What was the percentage change in the value of the naira versus the euro by August 18, 2016?

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Assumptions Initial spot rate, June 17 Closing spot rate, June 20 Closing spot rate, August 17 Rate S1 S2 S3 NGN per USD 196.50 279.50 324.50 NGN per EUR 221.2001 316.7294 347.7721