June 27, 2023

Nigeria Economic Update (Issue 23)

Following the new government’s plan to unify multiple exchange rates in the foreign exchange (forex) market, the Central Bank of Nigeria (CBN) has taken the monetary policy decision of floating the Naira. In its latest press release, the apex bank declared some operational changes in the forex market. This includes the abolishment of segmentation and collapsing of all segments in the market into the Investors & Exporters (I&E) window, thus, granting commercial banks and other authorised dealers the green light to sell forex at free, market-determined rates.

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Nigeria Economic Update (Issue 12)

The naira/dollar exchange rate remained largely stable at the parallel market at ?320/$ during the period7, albeit slight fluctuations on February 29, 2016 (?325/$) and March 2, 2016 (?328/$). The decline in the hoarding of foreign currency as well as the substantial reduction in the speculative demand for dollars were the two key factors responsible for the ease of fluctuations in the forex market8. With the slight increase in the price of crude oil, Nigerias foreign reserve slightly grew by $56 million, from 27.81 billion to $27.84 billion9. With the continued increase in the price of crude oil, a modest build-up of foreign reserve to guard against unfavourable commodity price movements is expected in the near term.