"The purpose of this study is to report, from an institutional perspective, Nigeria's experience of using the auction system in the allocation of foreign exchange, as a way of arriving at "a realistic exchange rate". In addition, the various modifications to the system at different stages of the SFEM and the causal forces will be identified and analyzed. Section II briefly discusses the research framework that provides the basis for the analysis carried out in later sections. Section III is a chronological report of the Nigerian foreign exchange policies from 1960 through 1990. The major emphasis is on the institutional framework through which FOREX rates have been determined. Section IV presents post-reform FOREX allocating mechanisms, highlighting the market types, operators in the different markets and what convergent rules were in place in the markets over the period of the study. The last part of Section IV evaluates the competitiveness of the FOREX markets and the consequence of this for a homogeneous, and hence competitive, exchange rate. In Section V, a comparative analysis of the pre- and post-reform periods will be done."