In a recent development, the Central Bank of Nigeria (CBN) has reportedly instructed banks to engage in foreign exchange trading within the Investors & Exporters (I&E) window using a flexible exchange rate system based on willing buy and willing sell arrangements. While the CBN is yet to release an official statement regarding this directive, two banking executives have confirmed its existence to Vanguard.
Following this directive, the exchange rate within the I&E window experienced a significant surge, reaching N610 per dollar as of 12:50 pm today. This substantial increase from the previous day’s rate of N471.67 has sent shockwaves throughout the market.
Nnamdi Nwizu, an investment banker and the Co-founder of Comercio Partners, shared his insights on the immediate impact of this directive. He expressed that the Nigerian economy is likely to witness enhanced foreign exchange inflows as a result. However, he also warned that this move could contribute to a further rise in the inflation rate, given the aggressive surge observed in the I&E window exchange rate today.
While the CBN’s motive behind this directive remains undisclosed, it has certainly caused ripples in the financial landscape. Market participants eagerly await an official statement from the central bank to gain further clarity on this development and its potential long-term implications.
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