“Market Forces to Ultimately Determine Exchange Rate” – CBN

Following the release of the long awaited forex guideline, the Central Bank of Nigeria, CBN, has said there will be only one exchange window.

The apex bank on Wednesday, June 15 said it would collapse the regulated and the unofficial foreign exchange windows into one entity.

CBN Governor Godwin Emefiele, who spoke in Abuja, said: “There is one window and that is what it will be.As long as there is one window, whatever comes out at the end of the day as the marginal rate will be the rate that is recognised officially by the world.”

“I do not expect that another rate will be recognized in the market. He said under the new flexible exchange rate market initiative, the CBN has pegged the minimum amount primary dealers are required to trade in at $10 million.”

Highlighting the framework and operational guidelines of the flexible exchange rate regime, Emefiele said the market shall operate as a single market structure through the inter-bank/autonomous window.

He stressed that the Exchange Rate would be purely market-driven, using the Thomson-Reuters Order Matching System, as well as the Conversational Dealing Book.

The apex bank will participate in the market through periodic interventions, to either buy or sell forex as the need arises.