Today’s Dollar to Naira exchange rate reflects the latest data from the FMDQ Security Exchange, the official forex trading portal in Nigeria. The Naira opened at ₦824.58 per dollar on January 26, 2024, and closed at ₦891.90 per $1 on the same day.
Despite the official rates, there is a significant disparity, as the Naira is trading as high as ₦1,425 per Dollar in the black market. This discrepancy persists even after the Central Bank of Nigeria (CBN) announced the unification of all segments of the foreign exchange market.
In a circular issued on June 14, 2023, the CBN abolished segmentation, collapsing all FX windows into the Investors and Exporters (I&E) window. The circular also reintroduced the “Willing Buyer, Willing Seller” model at the I&E Window, allowing eligible transactions to access foreign exchange at this window.
Additionally, the operational rate for all government-related transactions is determined by the weighted average rate of the preceding day’s executed transactions at the I&E window. The circular proscribes trading limits on oversold FX positions, with permission to hedge short positions with OTC futures. Limits on overbought positions are set at zero.
The CBN reintroduced order-based two-way quotes with a bid-ask spread of N1, ensuring transparency of orders and seamless execution of trades. The Order Book, which contributes to transparency, has also been reintroduced.
Operational hours for trades are specified from 9 a.m to 4 p.m, Nigeria time. The changes indicate a shift towards a free-floating exchange rate, allowing market forces to determine the Naira’s external value.
The CBN emphasized that further guidance on operational changes would be communicated to authorized dealers and the general public as needed. These developments suggest a loosening of control over the Naira, allowing it to float more freely in response to market dynamics.