The Central Bank of Nigeria (CBN) has authorised commercial banks to sell foreign exchange at their own rate at the Investors and Exporters’ (I&E) Window of the foreign exchange market.
The development is coming barely five days after the sack of former CBN Governor Godwin Emefiele, who dictated rates at which the dollar was sold at the three different FX windows.
The removal of the rate cap on the naira at the I&E window, will allow for a free float of the Naira against the dollar and other global currencies.
An FX dealer hinted that as of 12 noon on Wednesday, the Naira was already exchanging at N750 to U.S. dollar.
President Bola Tinubu had last Friday, removed Emefiele as the CBN Governor, following the ongoing investigation of his office and the planned reforms in the financial sector of the economy.
The President had appointed the Deputy Governor, Operations Directorate, Folashodun Adebisi Shonubi to oversee the apex bank in acting capacity.
In his maiden address after taking the oath of office, Tinubu had among others, promised a holistic FX reform that includes harmonizing exchange rates in other to woo investors into Nigeria.
Emefiele’s unorthodox monetary policies had become a huge stumbling block to investors and the Nigeria’s economy as a whole.
The ousted CBN Governor had rejected calls by the World Bank and the International Monetary Fund (IMF) to float the Naira to boost Nigeria’s ailing economy.
Speaking to journalists during the 2022 Spring Meetings of the IMF and World Bank, in Washington DC, United States, Emefiele stated that “Nigeria cannot bear the repercussion of floating the naira completely.”
“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself. When you allow that to happen, you will have an uncontrollable spiral on the naira. But what managed float means is that we have some measures in place to help control the spiral,” Emefiele had said.
Details later…