The Central Bank of Nigeria (CBN) has taken a decisive step towards foreign exchange rate convergence by adopting a clean float at the interbank market.
This liberal approach allows the forces of demand and supply to determine the equilibrium exchange rate. As a result, the CBN adjusted the bank rate for the naira, causing a sharp decline from approximately N466 per dollar on Tuesday to a range of about 750/$ to 755/$ yesterday.
The naira also experienced a significant depreciation of 29% to N664.04/$ at the investor’s and exporters’ (I&E) window, indicating a broader adjustment of exchange rates.
Previously, the naira had remained relatively stable, trading within a narrow range around N735/$ since December 2022. However, recent weeks saw an uptick in the value of the dollar, leading to the CBN’s decision to adopt a clean float.
Confirming the exchange rate adjustments, the CBN announced the collapse of all exchange rates in the I&E window. The statement, signed by Angela Sere-Ejembi, the Director of Financial Markets, informed eligible transactions to access foreign exchange through the I&E window. Additionally, the statement announced the discontinuation of the RT200 FX Programme, effective June 30, 2023.
