In what appears to be a subtle downgrade, the Central Bank of Nigeria (CBN) has given depository banks and dealers the power to freely sell foreign exchange at market-set rates.
The decision to move the exchange rate came shortly after Godwin Emefiere was suspended as CBN president. In his inaugural address, President Bola Tinub announced plans to unify Nigeria’s multi-tiered exchange rate. Several proposals have been made to devalue the country’s currency to attract foreign investment inflows.
Mr. Emefiere has been unwilling to devalue the currency for many years. However, the decision continues to affect the influx of foreigners into the local economy. Again, some foreign investors were unable to raise money abroad.
Monetary authorities have initiated capital controls due to lack of foreign currency. Earnings from oil sales abroad have been squeezed by a lack of investment in this area.
In response, the foreign exchange rate for investors and exporters surged to 755 naira per dollar at 12 naira.
Last night from N471.67 to 5pm. The exchange rate plummeted after major banks removed interest rate caps for investor-exporter (FX) windows. A CBN spokeswoman did not respond to a request for comment on Apex Bank’s overall plans for the floating rate decision.
