Home Business CBN Unfolds Flexible Foreign Exchange Regime, Devalues Naira

CBN Unfolds Flexible Foreign Exchange Regime, Devalues Naira

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The value of the Nigerian currency may have been devalued to the dollar as the Central Bank of Nigeria on Wednesday announced a flexible foreign exchange regime that would see the country abolishing the dual exchange rate regime.

SaharaReporters reports that under the new plan, the official exchange rate of the naira will exist in a “single flexible window,” which will likely be determined by market forces.

The announcement end months of speculation about the official value of the Nigerian currency.

President Muhammadu Buhari, who is currently on medical vacation in the United Kingdom, had initially opposed any form of devaluation, but his hands appear to have been forced by the necessity of borrowing badly-needed funds to finance a budget hampered by a debilitating shortfall in oil production.

CBN Governor Godwin Emefiele’s press conference in Abuja announced a series of measures to manage the new forex policy; these include the introduction of Forex Primary Dealers, a Futures Market to enable end-users to lock down rates and 12 other measures to ensure transparency and stability of the new market.

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