Lagos, Nigeria – In a significant development today, Findwhosabi News has obtained the official exchange rates for the US dollar to the Nigerian Naira as of Thursday, October 12, 2023, which includes the rates from both Bureau De Change (BDC) and the Central Bank of Nigeria (CBN).
According to data released by the FMDQ Security Exchange, the official forex trading portal, the Naira opened at ₦776.49 per dollar and closed at ₦759.20 per dollar. This official exchange rate marks a critical benchmark for the country.
However, despite the Central Bank of Nigeria’s announcement of the unification of all segments of the foreign exchange market, the Naira is trading at a higher rate of N1045 per dollar in the black market.
The Central Bank of Nigeria, in a circular issued on June 14, 2023, declared the abolition of segmentation in the foreign exchange market. All FX windows have now been consolidated into the Investors and Exporters (I&E) window. This move introduced the “Willing Buyer, Willing Seller” model at the I&E window.
Key highlights of the circular include:
- Abolishment of Segmentation: All segments of the foreign exchange market have been merged into the Investors and Exporters (I&E) window. Transactions for medicals, school fees, BTA/PTA, and SMEs will continue to be processed through deposit money banks.
- Reintroduction of “Willing Buyer, Willing Seller” Model: This model now governs operations at the I&E Window, in accordance with the extant circular from April 21, 2017. All eligible transactions can access foreign exchange at this window.
- Proscription of Trading Limits on Oversold FX Positions: Traders are now permitted to hedge short positions with OTC futures, while limits on overbought positions have been set to zero.
- Reintroduction of Order-Based Two-Way Quotes: These quotes come with a bid-ask spread of N1. All transactions will be cleared by a Central Counter Party (CCP).
- Reintroduction of Order Book: This feature ensures transparency of orders and facilitates seamless execution of trades.
- Operational Hours: Trading hours are from 9 a.m. to 4 p.m., Nigeria time.
The Central Bank of Nigeria noted that further guidance on the operational changes would be communicated to authorized dealers and the general public in due course. These changes signify that Nigeria has relaxed its control over the Naira, allowing the local currency to float freely in the foreign exchange market.
A free-floating exchange rate system means that the government no longer intervenes in setting the exchange rate. Instead, the exchange rate is determined by market forces, reflecting supply and demand dynamics without central bank influence.
This development has far-reaching implications for Nigeria’s financial markets and the Naira’s value against the US dollar. The effects of these changes are expected to ripple across various sectors of the Nigerian economy. Stay tuned for more updates on this developing story.