CBN moves towards unified naira exchange rate

The Central Bank of Nigeria (CBN) may have decided to allow the naira to weaken past its official rate as it gradually unwinds its regime of multiple exchange rates, data on its website show.

The apex bank stopped publishing the fixed naira exchange rate on its website and it now says that the rate will be “market-determined.’’ The central bank used to have an official rate as strong as N305 per dollar. That rate was used to ensure that some traders including, fuel importers, got cheap dollars.

Bloomberg reported that a move towards a market-determined exchange rate will be welcomed by investors, who have long accused the government of some level of capital controls and bemoaned the system of multiple exchange rates.

The CBN is in talks with other agencies to move to a single rate for the nation’s currency, Yewande Sadiku, the head of the Nigerian Investment Promotion Commission, said last month.

“Putting that on the website means the central bank is gradually moving towards a single exchange-rate window,” Kunle Ezun, a currency analyst at Ecobank transnational Inc in Lagos, said by phone. “It is making the exchange rate more liquid to attract more inflows.”

-The Nation