CBN, the Central Bank of Nigeria has authorized banks to sell foreign currency at their discretion. The move follows the dismissal of former CBN Governor Godwin Emefiele, who set the rates at which the dollar is sold at the country’s three distinct FX windows.
To entice investors, President Bola Tinubu pledged a comprehensive foreign exchange reform, including the harmonization of exchange rates.
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Tinubu appointed Folashodun Adebisi Shonubi, Deputy Governor, Operations Directorate, to administer the apex bank. We believe the changes herald a new era of focused, predictable monetary policy and a shift toward non-interventionism in the foreign-exchange regime, said Michael Kafe, an economist at Barclays.
The dollar is trading at the Investors & Exporters window. The Central Bank of Nigeria (CBN) refuted on Thursday that it had depreciated the Naira to N631 per dollar. CBN posted a graphical image with the words “fake news” to refute a Daily Trust claim that it depreciated the Naira.
According to the report, the CBN sold the spot rate to banks on behalf of their customers at N631 per dollar when the weekly bidding for foreign exchange resumed. The report also stated, the devaluation comes just 24 hours after the dollar sold for N461.6 at the Importers and Exporters (I&E) market on Tuesday.
According to CBN, it is fake news. President Bola Tinubu met with the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, in the presidential palace on Wednesday. The outcome of the briefing was not disclosed by either the presidency or Emefiele at the end of the meeting.
However, it was reported that the exchange rate was discussed at the conference. Tinubu announced his government’s determination to unify Nigeria’s exchange rate. In his inaugural speech at Eagle Square in Abuja on Monday after being sworn in as Nigeria’s 16th President, President Muhammadu Buhari said the CBN needed to replace the existing multiple exchange rate regime adopted under his predecessor’s government.
The president stated that the CBN’s Naira redesign policy did not take into account the number of unbanked Nigerians. Monetary policy requires comprehensive cleaning. The Central Bank must strive towards harmonized exchange rate.
The exchange rate is iced. This will divert cash away from arbitrage and toward meaningful investment in the plant, equipment, and jobs that power the real economy, Tinubu explained.
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Interest rates must be reduced in order to increase investment and consumer spending in ways that support the economy at a higher level. Whatever benefits it had in concept, the CBN administered the currency swap excessively brutally considering the number of unbanked Nigerians.
The policy will be reconsidered. In the meantime, both currencies will be treated as legal money by my government.”
This is crazy.😳😳