FOREIGN EXCHANGE: I&E NAIRA RATE HITS N755 AS BANKERS SAY THEY WERE DIRECTED TO TRADE FREELY
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According to reports, the Central Bank of Nigeria (CBN) has instructed deposit money banks to allow the naira to freely fluctuate against the dollar and other major world currencies.
The naira is now trading between N730 and N755 per dollar on Wednesday at the Investors and Exporters (I&E) market.
The naira currently trades between N730 and N750, according to bankers and consumers who transacted in foreign exchange on Wednesday, but the central bank has not yet made a formal announcement on the subject.
In his inauguration speech on May 29, 2023, President Bola Tinubu promised to synchronize exchange rates and end fuel subsidies. The development occurred just two weeks later.
“Monetary policy needs a thorough housecleaning. The Central Bank must work towards a unified exchange rate,” the President had said. “This will direct funds away from arbitrage into meaningful investment in the plant, equipment, and jobs that power the real economy.”
The incident also occurs despite the top bank’s insistence that it had not depreciated the naira to roughly 630 naira to a dollar on June 1, 2023.
The development implies that, in contrast to past practice where the CBN set prices, buyers and sellers of foreign currency on the official FX market are now free to quote their chosen rates.
The value of the naira decreased by approximately 20% as compared to the previous rate of N463/$1 at the new rate of N755/$1. Both in the I&E window and on the black market, the naira is currently equal to the dollar.
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