The Central Bank of Nigeria announces immediate Forex market operation changes, including the abolition of segmentation. Segments collapsed to the I&E window: medicals, school fees, BTA/PTA, and SMEs via banks.
The naira lost nearly 50% of its value in the official market, with the exchange rate in the I&E window increasing to N664.04 per dollar from N471. On Tuesday, the Central Bank of Nigeria announced measures to liberalize the market, resulting in a 67% increase in the dollar exchange rate. These measures include the elimination of multiple exchange rates and allowing banks to buy and sell foreign exchange freely based on willing buyer and seller terms.
“Reinstating the ‘Willing Buyer, Willing Seller’ model at the I&E Window, following the guidelines from the circular dated April 21, 2017 (FMD/DIR/CIR/GEN/08/007).” Eligible transactions can access foreign exchange here.
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Calculation of the government transaction rate based on the previous day’s I&E window transactions, with two decimal places. Prohibition of oversold FX trading limits, but short hedging is allowed with OTC futures. No overbought positions are allowed. The bid-ask spread is set at N1. All transactions were cleared by CCP. The order book was reintroduced for transparent and seamless trades. Trades from 9 a.m.–4 p.m. Nigeria time. The RT200 Rebate and Naira4Dollar Remittance schemes end on June 30, 2023. More guidance will follow.
The I&E window rate closed at N664.04 per dollar, up from N471 (FMDQ data). The dollar fell to 67% on Tuesday while the naira gained N13 in the parallel market, dropping the exchange rate to N755 per dollar from N768 per dollar. Analysts say CBN has floated the naira, eliminating multiple exchange rates and improving forex inflow and government revenue by N4 trillion.
They mentioned that the development will hike prices, add N12 trillion to government debt, and raise the debt-to-GDP ratio.
