The official exchange rate for the United States Dollar (USD) to the Nigerian Naira (NGN) as of October 11, 2023, is as follows:
Opening Rate: ₦770.69 per US dollar Closing Rate: ₦776.80 per US dollar
Please note that this data is based on information provided by the FMDQ Security Exchange, the official forex trading portal.
However, it is essential to be aware that despite the official exchange rate, the Naira is trading at a much higher rate of ₦1045 per US Dollar in the black market. This significant variance in rates occurs despite the Central Bank of Nigeria’s announcement regarding the unification of all segments of the foreign exchange market.
The Central Bank of Nigeria (CBN) declared the collapse of all FX market segments into the Investors and Exporters (I&E) window in a circular dated June 14, 2023. The circular outlined several key changes:
- Abolishment of Segmentation: All FX market segments were merged into the Investors and Exporters (I&E) window. Certain transactions like medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
- Reintroduction of “Willing Buyer, Willing Seller” Model: This model applies to the I&E window, allowing eligible transactions to access foreign exchange at this window.
- Operational Rate for Government-Related Transactions: The operational rate for all government-related transactions is based on the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two decimal places.
- Proscription of Trading Limits: Oversold FX positions can be hedged with OTC futures, and limits on overbought positions are set to zero.
- Reintroduction of Order-Based Two-Way Quotes: This includes bid-ask spreads of N1, with all transactions cleared by a Central Counter Party (CCP).
- Reintroduction of Order Book: To ensure transparency of orders and seamless execution of trades.
- Operational Hours: The operational hours of trades are from 9 a.m. to 4 p.m. Nigeria time.
These operational changes in the foreign exchange market indicate that Nigeria has eased its control over the Naira’s exchange rate, allowing it to float more freely in response to market forces. A free-floating exchange rate implies that the exchange rate is determined purely by market dynamics, without significant intervention by the central bank.