The Central Bank of Nigeria (CBN) is showing signal of exchange rate convergence as it has declared its official rate “market determined”.
The move will allow the naira to weaken past its official rate as it gradually unwinds its regime of multiple exchange rates.
Naira traded and closed at the rate if N360.63 per dollar at the investors and exporters foreign exchange window and N360/$ at the Bureau De Change (BDC)/parallel market.
The regulator usually publish on its website, the inflation rate numbers, exchange rate to USD, Monetary Policy Rate (MPR), and crude oil numbers, but as at Tuesday, the exchange rate numbers has been removed and replaced with “the naira exchange rate is market determined”.
Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) had last month at Ibadan said Nigeria does not operate multiple exchange rate but has multiple foreign exchange window.
The Nigeria’s foreign exchange windows include the investors and exporters forex window, the inter-bank window, the official, the window for Small and Medium Enterprises (SMEs), business travel allowance (BTA) and Personal travel allowance (PTA).
Emefiele said the foreign exchange has substantially converged at N360 per dollar at the Nigerian Autonomous Foreign Exchange (NAFEX) window and Bureau De Change (BDC) segment of the market.
The CBN on Tuesday CBN injected a total of $210 million into the inter-bank forex market.
Figures obtained from the CBN indicated that authorized dealers in the wholesale segment of the market were offered the sum of $100million, while the Small and Medium Enterprises (SMEs) segment received the sum of $55 million. The sum of $55 million was allocated to customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others.
Confirming the figures, the Director, Corporate Communications Department, Isaac Okorafor reaffirmed the Bank’s commitment towards ensuring stability in foreign exchange market.
It will be recalled that at the last intervention on Friday, June 7, 2019, the Bank injected the sum of $294.7million and CNY31.4million into the Retail Secondary Market Intervention Sales (SMIS) segment.
Gross official reserves increased by US$330m in May to US$45.12 billion. It has risen to $45.17 billion at June 6, 2019.
Hope Moses-Ashike
