The naira/dollar exchange rate on Tuesday converged, as it closed at the rate of N756 at the Investors and Exporters (I$E) forex window, Nigeria
The naira/dollar exchange rate on Tuesday converged, as it closed at the rate of N756 at the Investors and Exporters (I$E) forex window, Nigeria’s official market and at the parallel market.
The convergence followed the recent foreign exchange (FX) reforms carried out by the Central Bank of Nigeria (CBN).
After trading on Tuesday, dollar was quoted at N756.61 representing 1.81 percent gain over N770.38/$ quoted on Monday at the I&E window, data from the FMDQ indicated.
Naira also appreciated at the parallel market, popularly called black market, gaining N1 as the dollar closed at N756 as against N757 on Monday.
On whether the convergence is sustainable, Taiwo Oyedele, head of tax and corporate advisory services at PwC Nigeria, said the forex market is still volatile as it continues its journey of price discovery.
Read also: States to earn more naira after exchange rate reform
“I think it is too early to conclude if the rates convergence will be sustained although that is the long term objective,” he said.
For Ayodele Akinwunmi, relationship manager, corporate banking at FSDH Merchant Bank Limited, “If the official market is well supplied to meet the genuine foreign exchange needs of businesses and individuals the rate at the parallel market will crash as fewer people will patronise that market.”
The CBN on June 14, 2023 collapsed all segments of foreign exchange markets into the I&E forex window.
On Friday, the CBN in a letter to all banks said cash deposits into domiciliary accounts will not be restricted, and that customers shall have unfettered and unrestricted access to funds in their accounts.
The letter signed by Haruna Mustafa, the CBN’s director, banking supervision department, said the new FX policy change aims to promote transparency, liquidity, and price discovery in the FX market in order to improve FX supply.
Nigeria’s Central Bank has clarified that its recent FX reform was not a free float but a managed float. Kingsley Obiora, the CBN’s deputy governor in charge of economic policy said this in a recent interview with Bloomberg in Rabat, Morocco.
In the interview, the deputy governor said the country plans to announce further measures to loosen foreign exchange controls, adding that Nigerians should expect more policy changes “in the next couple of weeks.”
The naira/dollar exchange rate on Tuesday converged, as it closed at the rate of N756 at the Investors and Exporters (I$E) forex window, Nigeria’s official market and at the parallel market.
The convergence followed the recent foreign exchange (FX) reforms carried out by the Central Bank of Nigeria (CBN).
After trading on Tuesday, dollar was quoted at N756.61 representing 1.81 percent gain over N770.38/$ quoted on Monday at the I&E window, data from the FMDQ indicated.
Naira also appreciated at the parallel market, popularly called black market, gaining N1 as the dollar closed at N756 as against N757 on Monday.
On whether the convergence is sustainable, Taiwo Oyedele, head of tax and corporate advisory services at PwC Nigeria, said the forex market is still volatile as it continues its journey of price discovery.
Read also: States to earn more naira after exchange rate reform
“I think it is too early to conclude if the rates convergence will be sustained although that is the long term objective,” he said.
For Ayodele Akinwunmi, relationship manager, corporate banking at FSDH Merchant Bank Limited, “If the official market is well supplied to meet the genuine foreign exchange needs of businesses and individuals the rate at the parallel market will crash as fewer people will patronise that market.”
The CBN on June 14, 2023 collapsed all segments of foreign exchange markets into the I&E forex window.
On Friday, the CBN in a letter to all banks said cash deposits into domiciliary accounts will not be restricted, and that customers shall have unfettered and unrestricted access to funds in their accounts.
The letter signed by Haruna Mustafa, the CBN’s director, banking supervision department, said the new FX policy change aims to promote transparency, liquidity, and price discovery in the FX market in order to improve FX supply.
Nigeria’s Central Bank has clarified that its recent FX reform was not a free float but a managed float. Kingsley Obiora, the CBN’s deputy governor in charge of economic policy said this in a recent interview with Bloomberg in Rabat, Morocco.
In the interview, the deputy governor said the country plans to announce further measures to loosen foreign exchange controls, adding that Nigerians should expect more policy changes “in the next couple of weeks.”
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