- The Central Bank of Nigeria has abolished all exchange rates, including the black market
- The move is to unify the foreign exchange market in the country and strengthen the naira
- The unification move by the CBN led to the fall of the naira at the official market on Wednesday, June 14, 2023
The Central Bank of Nigeria (CBN) has announced changes in the foreign exchange market.
According to a statement by the apex bank on Wednesday, June 14, 2023, all forex transactions shall now be done through the Investors and Exporters (I&E) window, thereby abolishing the country's parallel and other forex markets.
CBN makes powerful changes to forex trading in Nigeria as the naira falls
The CBN also made a raft of changes in the operation of the forex market and trading in Nigeria, and the bank's Director of Financial Markets, Angela Sere-Ejembi, signed the statement.
Naira sells for as high as N791 to dollar at official market, as CBN obeys President Tinubu's instructions
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The development comes as the apex bank seeks to unify all exchange rates in Nigeria in line with the promise of President Bola Tinubu.
Tinubu, in his inauguration speech on May 29, 2023, said the CBN should work to unify the exchange rates in the country.
Earlier on Wednesday, June 14, 2023, the CBN announced the floating of the naira, asking banks to trade forex 'freely,' leading to the fall of the local currency from N610 to N775 to a dollar, a 28.9% drop.
Experts believe the naira will bounce back
Analysts believe the naira will rally as the CBN, banks, and individuals pump foreign exchange into the market.
Also, the move will encourage investors, especially portfolio investors, and attract foreign direct investment into the country.
Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PwC, in a Twitter post, said the move would drive foreign direct investment in the country, among other things.
"The country will attract fx inflows, especially from portfolio investors, FDI, and exporters' proceeds. The impact on diaspora remittances would be marginal. The capital market will benefit as it is likely to appreciate further as foreign investors take a position."
Bloomberg reports that the CBN allows the naira to slump to a record to phase out currency controls distorting the country's economy for years.
The CBN had earlier fixed the rate it sells dollars to exporters and investors at N610.20, a 22% devaluation.
Naira falls massively to N755 at official market as CBN fulfils President Tinubu’s Wishes
Legit.ng reported that in a significant development, the Nigerian naira had reached the value of N755 per dollar at the investors and exporters window, now the official market rate.
BusinessDay reports that the Central Bank of Nigeria (CBN) instructed commercial banks to engage in forex trading based on market-determined rates.
According to multiple sources, Nigeria has officially adopted a floating exchange rate system for its currency, abandoning the long-held hard peg that had deterred investors and depleted its foreign currency reserves.