CBN Implements Policy Shift to Promote Naira’s Free Float
In a significant move aimed at unifying exchange rates and promoting market flexibility, the Central Bank of Nigeria (CBN) has instructed Deposit Money Banks to eliminate the rate cap on the naira at the Investors and Exporters’ (I&E) Window of the foreign exchange market.
This decision grants the national currency the freedom to fluctuate against the dollar and other global currencies.
President Tinubu’s Pledge to Unify Exchange Rates Gains Momentum
The recent directive from the CBN comes shortly after President Bola Tinubu publicly vowed to unify Nigeria’s multiple exchange rates.
This move underscores the government’s commitment to streamlining the nation’s foreign exchange system, fostering transparency, and enhancing economic stability.
Banks and Customers Welcome New Trading Opportunities
Confirmed by the CEO of a prominent commercial bank, the CBN’s decision has generated considerable enthusiasm within the banking industry.
Under the new guidelines, banks and their customers are now authorized to engage in forex trading within the I&E window without restrictions on the exchange rate, except for a minimal spread of N1 between the buying and selling rates.
As a result of this development, the naira experienced a depreciation during Wednesday’s trading session on the I&E window, with the exchange rate surpassing N700 per dollar.