CBN to Eliminate Multiple Exchange Rate Regime

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SWITZERLAND, JUNE 24 – The Central Bank of Nigeria (CBN) yesterday announced its plan to eliminate the multiple exchange rate regime in the country.

This was disclosed by the Governor of the apex bank, Mr. Godwin Emefiele who confirmed the plans for the unification of exchange rates yesterday.

In the same vein, The Minister of Finance last week indicated the government’s plan to eliminate the multiple exchange rate regime. It was stated in a document that over the next 12 months the government would seek to unify the exchange rates to generate more naira from its foreign inflows and manage the rate in a sustainable manner.

The multiple exchange rate regime has led to the emergence of different exchange rates in the three major segments of the foreign exchange market, namely the official market, the Investors and Exporters (I&E) window also known as NAFEX, and the parallel market.

The exchange rates in the three major segments as at the close of trading yesterday are; Official market-N361 per dollar; I&E window-N386.63 per dollar; parallel market-N457.5 per dollar.

While speaking at an Investors Conference with the Federal Government of Nigeria organized by CitiBank, Emefiele disclosed that the various exchange rates will be unified around the I&E window (NAFEX) exchange rate. The conference which was held online was titled Covid-19. Economic and Budgetary Update.

“We will continue to pursue unification around the NAFEX Market”, Emefiele said, noting that as at the end of 2019, Nigeria experienced a “relatively stable market because the NAFEX rate and rate that the Central Bank does transaction outside the NAFEX was close to themselves. At some point, the NAFEX rate me below the Central Bank rate”

Emefiele also complained about the illegal activities in the parallel market adding that the operators in the market are “doing dealings that are not recognized by authorities,”

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