- Official, parallel market rate To converge Soon
In continuation of the new administration’s efforts to radically kickstart the economy, the Central Bank of Nigeria (CBN) has directed banks to remove the cap on the investors and exporters’ (I & E) window of the forex market to allow for the free float of the naira exchange rate.
Accordingly, banks are now allowed to trade forex on the I & E window at any rate, subject to N1 spread thus confirming indications that the gap between official and parallel market rate of the naira may soon be bridged.
Although the Central Bank had denied reports that it was about to officially devalue the naira, the new development has led the naira to depreciate to around N700 to N750 to a dollar on the I&E window on Wednesday. An influential member of the President Bola Ahmed Tinubu’s advisory board, Mr. Wale Edun, on Monday, said the country would unify its exchange rates “imminently”.
“I would say it would have to be done within a quarter as rather than within a year,” he said. “ I think you’re talking, think quarters rather than years, that’s where I would put it.”
More details later
