Despite the Central Bank of Nigeria yet to roll out the details of the new flexible exchange rate policy, which is a monetary system that allows the exchange rate to be determined by supply and demand, the nation’s currency naira has switched to N285 to a dollar at the interbank market, The Guardian reports.
The policy, which throws naira into open market, paves way for one to walk into the bank and ask to buy forex at the market rate, hence, putting pressure on black market and Bureau de Change operators.
The new policy also means that banks and Bureau De Change (BDC) operators will have to source forex autonomously and sell according to market dynamics.
The interbank rate had run nearly at par with the official at N199 per dollar and N197 per dollar respectively before the pronouncements on the new foreign exchange measure.
The new rate represents about 43.2% increase from N199 to the dollar it previously traded, which according to analysts suggests that the market is gradually adjusting itself to the new direction, although the details are yet to be unfolded.
However, a look on the apex bank official website, www.cbn.gov.ng has shown the naira is still pegged at N197.
Meanwhile, President Muhammadu Buhari has given the CBN the go-ahead to introduce flexibility in the naira exchange rate.
Speaking in an interview on Nigeria Television Authority (NTA), Garba Shehu, the senior special assistant on media and publicity to President Buhari said: “The president is opposed to devaluing the naira, he has said so repeatedly.
“He has given them leeway to introduce what he has called ‘flexibility in managing’ the currency’s value.”
Buhari said at the weekend that he supported a stable currency, though he would keep “a close look at how recent measures affect the naira and the economy.”
More details later.