In a financial tango that affects wallets nationwide, the official exchange rate between the Naira and the US dollar has taken center stage. As of August 19, 2023, Findwhosabi News brings you the latest insights into this ever-shifting forex landscape.
According to data sourced from the FMDQ Security Exchange, the official forex trading portal, the Naira’s performance against the dollar has been a dynamic spectacle. Opening the day at ₦761.82 per dollar, the Naira’s dance with the greenback concluded at ₦739.52 per $1 on Friday, August 18, 2023.
This dramatic fluctuation comes on the heels of a significant announcement from the Central Bank of Nigeria (CBN). On June 14, 2023, the CBN declared the unification of all forex exchange market segments, a move aimed at streamlining operations and enhancing market efficiency.
The apex bank’s circular unveiled a series of changes:
Segmentation Abolished: All segments are now merged into the Investors and Exporters (I&E) window. Transactions for medicals, school fees, BTA/PTA, and SMEs will be routed through deposit money banks.
Willing Buyer, Willing Seller: The I&E window reintroduces this model, allowing eligible transactions to access foreign exchange. The operational rate for government-related transactions will be based on the previous day’s weighted average rate at the I&E window.
Trading Limits Revised: Oversold FX positions can now be hedged with OTC futures, while limits on overbought positions are set at zero.
Order-Based Two-Way Quotes: Bid-ask spreads of N1 enhance transparency, with all transactions cleared by a Central Counter Party (CCP).
Order Book Reintroduced: This ensures transparent orders and seamless trade execution.
Operational hours for trades are set from 9 a.m to 4 p.m, Nigeria time.
The ripple effects of these operational changes underscore Nigeria’s gradual move towards a more liberalized forex market. This transformation allows market forces to exert greater influence on the Naira’s value, marking a significant shift in the country’s currency management approach.
In a financial landscape where the dance between Naira and dollar has profound repercussions for the economy, these developments hold implications for businesses, investors, and the general public. As the Naira’s performance continues to take center stage, economic observers and citizens alike watch with bated breath, anticipating the next moves in this intricate financial performance.