Naira gains at N782/$ in official market

The naira yesterday recorded marginal gain of N6 to close at N782/$ in the Investors and Exporters (I&E) window- official market.
The appreciation of the local currency followed improved liquidity and transaction activities at the official window.

The naira had on Monday closed at N744/$ at the I&E window, made a N44/$ loss on Tuesday and a sudden rebound yesterday.

The Central Bank of Nigeria (CBN) unified exchange rates into the I&E window and allowed market forces to determine exchange rate for the naira.

Data from FMDQ Exchange showed gradual drop in market liquidity from over $260 million turnover to less than $70 million in recent weeks.

The I&E window was activated in June 2017, and represents the broader forex market, where dollars sourced from autonomous sources are traded between Authorised Dealers, Clients and the CBN.

This forex window is also the market for the FMDQ Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) benchmark.

The rate at the I &E window has come to represent the official rate for the naira after the CBN abolished multiple exchange rates in 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, which 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.

CEO of Moniepoint, Tosin Eniolorunda, said the CBN’s decision to float the naira is a step in the right direction for our economy, ensuring investor confidence continues to grow.

“The decision is good for business, jobs and growth. It will help Nigeria’s entrepreneurs to do business globally and attract foreign investment. It will also help reduce inflation, leaving more money in people’s pockets,” he said.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe advised the CBN to ensure liquidity in the retail end of the market by de-monopolizing diaspora remittances and stronger collaboration with BDCs which control the retail end of the forex market.