In a recent development, Findwhosabi News has secured the latest updates on the Dollar to Naira exchange rate for today, February 5, 2024. The official rates include data from both the Bureau De Change (BDC) and Central Bank of Nigeria (CBN).
Official Exchange Rate Highlights:
According to information sourced from the FMDQ Security Exchange, the official forex trading portal, the Naira kicked off trading at ₦1478.12 per dollar on Thursday, February 1, 2024. The week concluded with the Naira closing at ₦1435.53 per $1 on Friday, February 2, 2024.
Surprisingly, the black market is witnessing a higher exchange rate, with the Naira trading at ₦1,425 per Dollar. This is despite the Central Bank of Nigeria’s (CBN) announcement of the unification of all segments of the foreign exchange market.
CBN’s Policy Changes:
In a circular issued on June 14, 2023, the CBN made significant adjustments to the foreign exchange market. All FX windows were consolidated into the Investors and Exporters (I&E) window. Transactions related to medicals, school fees, BTA/PTA, and SMEs continued to be processed through deposit money banks.
Additionally, the “Willing Buyer, Willing Seller” model was reintroduced at the I&E Window, with operations guided by a previous circular dated April 21, 2017. The operational rate for government-related transactions is now based on the weighted average rate of the preceding day’s executed transactions at the I&E window.
The CBN also proscribed trading limits on oversold FX positions, allowing the hedging of short positions with OTC futures. Furthermore, order-based two-way quotes were reintroduced, maintaining a bid-ask spread of N1, and transactions are cleared by a Central Counter Party (CCP).
Implications for the FX Market:
These operational adjustments signify a significant shift in Nigeria’s control over the Naira, indicating a move towards a more flexible exchange rate. A free-floating exchange rate model allows market forces to determine the exchange rate without central bank interference.
The operational hours for trades have been specified from 9 a.m to 4 p.m, Nigeria time, and further guidance on these changes will be communicated to authorized dealers and the general public in due course. Findwhosabi News will continue to monitor and update on developments in the dynamic foreign exchange landscape.