Naira slumps as CBN commences rates harmonisation, faces supply hurdle

THE GUARDIAN 

The Central Bank of Nigeria (CBN) may have embraced the painful, but realistic path to foreign exchange rate convergence, adopting a clean float at the interbank market.

The option, a liberalist move that supports the interplay of demand and supply to determine the equilibrium rate, saw the apex bank pulling the trigger on the naira at the bank rate, which plunged from about N466 a dollar traded on Tuesday to about between 750/$ and 755/$ yesterday.

At the investor’s and Exporters’ (I & E) window, the naira also depreciated significantly by 29 per cent to N664.04/$, suggesting a broader adjustment of the rates.

Earlier in the week, naira traded at N765/$ band at the alternative market. Dusting off the historical volatility, the currency had traded at a narrow range around N735/$ since December 2022 until recent weeks when the dollar edged higher.

The CBN last night confirmed the collapse of all exchange rates in the Investors and Exporters’ (I &E) window directing all eligible transactions to access FX at the window.

The statement signed by the Director of Financial Markets, Angela Sere-Ejembi, also informed that the RT200 FX Programme ceases to exist effective June 30, 2023.

According to the bank, all government transactions would be executed using the average rates of the previous day’s trading at the I $E.

Most banks had earlier communicated the changes to their customers and were quoting above N700/$ for buying and selling rates…