The official exchange rate for the US dollar to the Nigerian Naira as reported by the FMDQ Security Exchange, the official forex trading portal, is as follows:
Opening Rate: ₦774.09 per dollar on Friday, September 14, 2023. Closing Rate: ₦780.00 per dollar on Friday, September 14, 2023.
Background Information
On June 14, 2023, the Central Bank of Nigeria (CBN) announced significant changes in the country’s foreign exchange (FX) market. These changes were aimed at unifying different segments of the FX market and introducing reforms to improve market operations. Key highlights of the CBN’s announcement include:
Abolishment of Segmentation: All FX windows were merged into the Investors and Exporters (I&E) window, eliminating segmentation. Transactions related to 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 was reintroduced at the I&E Window. It allows eligible transactions to access foreign exchange at this window.
Operational Rate for Government-Related Transactions: The operational rate for government-related transactions would be the weighted average rate of the preceding day’s executed transactions at the I&E window, rounded to two decimal places.
Proscription of Trading Limits on Oversold FX Positions: With permission to hedge short positions with OTC futures, trading limits on oversold FX positions were proscribed. Limits on overbought positions would be set at zero.
Reintroduction of Order-Based Two-Way Quotes: Bid-ask spreads of N1 were introduced for order-based two-way quotes. All transactions would be cleared by a Central Counter Party (CCP).
Reintroduction of Order Book: To ensure transparency of orders and seamless execution of trades, the Order Book was reintroduced.
Operational Hours: The operational hours for trades were set from 9 a.m to 4 p.m, Nigeria time.
These changes represent a significant shift in Nigeria’s approach to its exchange rate policy, allowing the Naira to float more freely and be influenced by market forces. The CBN aims to improve transparency and efficiency in the FX market through these reforms.
Further guidance on these operational changes is expected to be communicated to authorized dealers and the general public in due course.