×
  • Business - Economy
  • Updated: June 24, 2020

CBN's Godwin Emefiele Reacts To Unification Of Exchange Rates

CBN's Godwin Emefiele Reacts To Unification Of Exchange Rate

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has reacted to report that Nigeria is planning to unify its exchange rate and the market rate that will be used for the unification. His clarification follows a report by AllNews that the Nigerian government wants to end the era of multiple exchange rates in the country.

Days after it was reported, Emefiele confirmed the unification of the exchange rate while disclosing which of the market rate the unification will be tailored after. According to Emefiele, the unification of the exchange rate will be done in line with the rate from the Investors and Exporters Window (I&E Window), which is also called NAFEX, thereby, ruling out the parallel market.

While describing the similarity between the CBN and the Investors and Exporters window, Emefiele said as at December 2019, Nigeria experienced a “relatively stable market because of the NAFEX rate and rate that the Central Bank does transaction outside the NAFEX was close to themselves," adding that "at some point, the NAFEX rate below the Central Bank rate," he said in a Bloomberg report.

Note that on the I&E window, Naira has stabilized at N388 to $1, and it is expected to remain that way as oil price recovery results into higher forex inflows for Nigeria which gets about 90% of export earnings from crude oil.

Era Of Multiple Exchange Rates Coming To An End

AllNews first reported the unification of the exchange rate last week after the Minister of Finance, Zainab Ahmed said the idea has been embraced by the Nigerian government. In a Ministry of Finance document, Ahmed was said to have stated that Nigeria will unify the multiple exchange rates in order to generate more local currency from its dollar inflows.

Ahmed said the rate will be managed in a sustainable way. The new development comes at a period the country is having forex problems caused by the oil price crash and the economic fallout of the coronavirus pandemic in Nigeria. She also revealed that oil firms will be directed by the government to sell forex to the CBN rather than the Nigerian National Petroleum Corporation (NNPC). This is expected to help with the forex problem currently being faced within the country.

Related Topics

Join our Telegram platform to get news update Join Now

0 Comment(s)

See this post in...

Notice

We have selected third parties to use cookies for technical purposes as specified in the Cookie Policy. Use the “Accept All” button to consent or “Customize” button to set your cookie tracking settings