The official exchange rate for the US Dollar to the Nigerian Naira today, September 16, 2023, is as follows:
Opening Rate: ₦774.09 per dollar Closing Rate: ₦780.00 per dollar
The Central Bank of Nigeria (CBN) announced the unification of all segments of the forex exchange market on June 14, 2023. This means that all forex exchange segments have been collapsed into the Investors & Exporters (I&E) window. The key changes and details outlined by the CBN in this regard include:
Abolishment of segmentation: All segments are now part of the Investors and Exporters (I&E) window. Certain transactions like medicals, school fees, BTA/PTA, and SMEs will continue to be processed through deposit money banks.
Re-introduction of the “Willing Buyer, Willing Seller” model at the I&E Window: Operations in this window will follow the existing circular on the establishment of the window, dated April 21, 2017.
Operational rate for government-related transactions: The rate for all government-related transactions will be 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 hedge short positions with OTC futures, while limits on overbought positions shall be zero.
Re-introduction of order-based two-way quotes: Transactions will have a bid-ask spread of N1. All transactions shall be cleared by a Central Counter Party (CCP).
Reintroduction of Order Book: This is to ensure transparency of orders and seamless execution of trades.
Operational hours of trades: Trading hours will be from 9 a.m to 4 p.m, Nigeria time.
These changes indicate that Nigeria has allowed the Naira to float freely in the foreign exchange market, meaning that its exchange rate with the US Dollar and other foreign currencies will be determined by market forces without significant government intervention. This approach is often referred to as a free-floating exchange rate.