The Central Bank of Nigeria (CBN) yesterday said that it will eliminate the multiple exchange rates regime in the country.
CBN Governor, Mr. Godwin Emefiele disclosed this yesterday while confirming plans for unification of exchange rates.
The plan to eliminate the multiple exchange rate regime was similarly indicated by the Minister of Finance last week in a document which stated that the government over the next 12 months 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 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.
However, Emefiele, while speaking at an Investors Conference with the Federal Government of Nigeria organized by CitiBank, 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”
The CBN Governor dismissed activities in the parallel market as illegal business, adding that people patronizing the market are “doing dealings that are not recognized by authorities”
He said: “The CBN has always maintained that the black market is not a good determinant of the value of the naira. You’ll find that people who are in a hurry and do not want to procure the kind of documentation required, will sometimes rush to those markets. But we have used the period of this pandemic to prove that anybody dealing in that market is dealing in an illegal business.”
