The naira yesterday recovered from N107 loss it recorded on Monday to post N14 gain at the Investors’ and Exporters’ (I&E) window- the official market.
The appreciation of the naira brought it closer to the N760/$ rate at the parallel market, an indication of rate convergence.
The Central Bank of Nigeria (CBN) is implementing foreign exchange reforms meant to bring transparency and accountability into the market and boost foreign capital inflows to the economy.
The unification of multiple exchange rates into the I&E window has been described by stakeholders as a game-changer in the apex bank’s plan to achieve exchange rate stability.
The policy allows forex dealers and investors to buy and sell dollars at exchange rate of their choice, provided they can find buyers. This move aims to ensure that the naira is allowed to trade at the market-clearing rate in the forex market.
In an emailed report to investors, an economist and Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said the adoption of a single exchange rate and the “willing buyer-willing seller model” by the CBN was cheery news for the market.
He said the new exchange rate framework is expected to increase transparency in the forex market, reduce exchange rate misalignment and transaction costs, and buoy investor confidence.
