The Naira continued its decline as it traded at ₦1,780 per dollar on the black market on October 16, 2024. On the official market, data from FMDQ showed that the currency opened at ₦1,638.88 per dollar on October 14 and closed at ₦1,658.97 on October 15. This slide persists despite efforts by the Central Bank of Nigeria (CBN) to unify exchange rates across various market segments.
In June 2023, the CBN announced the consolidation of all forex windows into the Investors and Exporters (I&E) window, simplifying access to foreign exchange. The policy reintroduced the “Willing Buyer, Willing Seller” model, with transactions in the I&E window reflecting the weighted average of the previous day’s trade. The shift towards a free-floating currency means that the Naira’s value is now largely driven by market forces.
The CBN’s reform is intended to increase transparency and liquidity in the forex market by abolishing trading limits and reintroducing an order-based trading system. While the move aims to align exchange rates more closely with market dynamics, the Naira’s rapid depreciation indicates that further intervention or adjustments might be needed to stabilize the currency.