UTILIZATION OF COMMON CURRENCY IN ENHANCING INTERNATIONAL TRADE IN A RECESSED ECONOMY

Résumé

One of the reasons for establishing common currency is a result of instability of various countries economy and varying conflicting financial policies of different countries on how best to achieve economic stability. A single currency gets rid of uncertainty within the single currency zone, thereby encouraging international trade. Economic stability is normally achieved in a country through increased trade exchanges and varying opportunities for external investment. This article identified and discussed the implications of utilization of common currency in enhancing international trade. The study revealed that introduction of a common currency will create economic stability, a viable market size and expansion, a more stable currency, prevention of devaluation of currencies,, lowering interest rate, and more improvement in Foreign Direct Investment (FDI). The authors recommend that, Nigeria Government at all levels should support the bid by the African Union on introduction of a Common Currency in the sub-region. Financial policy makers of different countries in Africa should also encourage the introduction of a common Central Bank, Investors should encourage the introduction of a common currency as it ensures economic stability which encourages more Foreign Direct Investment (FDI).