Add news
March 2010
April 2010
May 2010June 2010July 2010
August 2010
September 2010October 2010
November 2010
December 2010
January 2011
February 2011March 2011April 2011May 2011June 2011July 2011August 2011September 2011October 2011November 2011December 2011January 2012February 2012March 2012April 2012May 2012June 2012July 2012August 2012September 2012October 2012November 2012December 2012January 2013February 2013March 2013April 2013May 2013June 2013July 2013August 2013September 2013October 2013November 2013December 2013January 2014February 2014March 2014April 2014May 2014June 2014July 2014August 2014September 2014October 2014November 2014December 2014January 2015February 2015March 2015April 2015May 2015June 2015July 2015August 2015September 2015October 2015November 2015December 2015January 2016February 2016March 2016April 2016May 2016June 2016July 2016August 2016September 2016October 2016November 2016December 2016January 2017February 2017March 2017April 2017May 2017June 2017July 2017August 2017September 2017October 2017November 2017December 2017January 2018February 2018March 2018April 2018May 2018June 2018July 2018August 2018September 2018October 2018November 2018December 2018January 2019February 2019March 2019April 2019May 2019June 2019July 2019August 2019September 2019October 2019November 2019December 2019January 2020February 2020March 2020April 2020May 2020June 2020July 2020
News Every Day |

CBN’s bid to unify FX rates around I&E window seen as big boost to attracting investment

Emefiele assures investors of safety, orderly exit of funds

Nigeria’s plan to unify its various foreign exchange rates around the investors and exporters window, I&E also known as the Nigerian Autonomous Foreign Exchange Market, NAFEX will remove a major obstacle to the ability of Africa’s biggest economy to attract and retain badly needed investment,  analysts and investors said Wednesday.

Central Bank Governor Godwin Emefiele who has been reticent on the matter, told investors Tuesday the apex bank would push the rate convergence around the rate on the I&E window which closed at N386.63 to the dollar yesterday.  It is the first time the bank governor would openly commit to a rate unification around a particular band and this could reinforce speculations last week that the official Naira rate had indeed moved.

“This is the clearest signal yet that Nigeria intends to do the right thing by maintaining a single rate for its currency as has been canvassed by investors for three years”, said Keith Clarke, a London-based economist and analyst advising a number of firms doing business in Africa.

A senior government official told BusinessDay last night that the principle of exchange rate conversion had been approved by President Muhammadu Buhari before the Coronavirus pandemic lockdown which has brought the economy to its knees.

It is expected that converging the rates around N387 to the dollar will also boost revenues of all the three tiers of government which could see an expansion of N20 on every US dollar earning in oil sales coming to the monthly FAAC allocation purse.

Speaking at an investors conference call held by Citi Bank Tuesday, Emefiele said, “what we mean by exchange rate unification is moving towards NAFEX. NAFEX is our dominant market for the purchase and sale of forex and it is a free market where everybody is free to sell their dollars and those who want to buy are free to buy dollars.

“That means that whether you are a businessman, a bank, CBN, and you have dollars, you can bring it to the market to sell and if you want to buy dollars you can also come to that market.”

Finance minister Zainab Ahmed as well as head of Nigeria’s debt management office, Pat Oniha also spoke at the event.

Nigeria has long resisted pressure for the unification of its various foreign exchange rates which spoke investors and led to allegations of lack of transparency and fairness by some.

Speaking at last week’s National Conversation organized by BusinessDay, the distinguished economist at Oxford university, Paul Collier said the multiple exchange rate system was damaging the Nigerian economy and wondered why any modern economy will adopt such a system that was prone to abuse.

Nigeria’s foreign exchange market has been virtually frozen in the last three months and this has seen the Naira falling persistently on the parallel market which the CBN governor condemned as a platform for those doing illegal business.

He said, “unfortunately, you find out that some people who do not want to procure the type of documentations that are required would sometimes rush to that market. But we have used the period of this pandemic to prove that anybody dealing in that market today is dealing in an illegal business.”

Nigeria is dealing with a foreign exchange demand backlog estimated at around $2.5bn at last week’s bankers committee meeting chaired by Emefiele, the CEO of one of the largest banks was mandated to lead work on finding a pathway to the resolution of this backlog which has also roiled the letters of credit, LC system which businesses have traditionally counted on.

Read also

Billionaire Kanye West and Khloe Kardashian among 700,000 business owners who pocketed coronavirus stimulus cash

What voucher schemes will Rishi Sunak announce in tomorrow’s mini-budget?

How gruesome ancient diseases like Black Death are coming back to life ‘thanks to anti-vaxxers & corpse dance rituals’

News, articles, comments, with a minute-by-minute update, now on — latest news 24/7. You can add your news instantly now — here