The naira closed stronger Friday by recording its first closing gain of N39/$1 at the Investors and Exporters (I&E) window, days after the Central Bank’s (CBN’s) unified the exchange rate.
The naira, which closed at N702/$1 on Thursday came back strong yesterday, closing at N663/$1, data from FMDQ Group said.
The rate unification policy allows forex dealers and investors to buy and sell dollars at exchange rate of their choice provided they can find buyers.
Since Wednesday when the policy came into force, the local currency first plummeted to over 15 years low before the ongoing recovery.
The new policy is part of the bold reforms promised by President Bola Tinubu.
Ranging from subsidy removal to some “housecleaning” at critical institutions to exchange rate unification, the market has responded positively.
The Nigerian equities market has outperformed its peers, gaining 13 per cent in the past two weeks
A major support for the unified exchange rate policy came from the International Monetary Fund (IMF) on Friday.
It expressed support for the Tinubu administration.
It pledged to give the government the required encouragement to ensure the success of the foreign exchange reforms.
The IMF, in a statement in Abuja by its Resident Representative in Nigeria, Ari Aisen, said it “ greatly welcomes the authorities’ decision to introduce a unified market-reflective exchange rate regime in line with our long-standing recommendations.
“We stand ready to support the new administration in its implementation of FX reforms.”
The Central Bank of Nigeria (CBN) ,in a June 14,2023 circular by its Director, Director, Financial Markets, Dr. Angela Sere-Ejembi, abolished segmentation in the foreign exchange (FX) market and collapsed all rates into the Investors and Exporters (I&E).
In effect, buyers and sellers of foreign currency in the official FX market are now allowed to quote rates they find comfortable in the FX market.
President Bola Tinubu had said during his inauguration on May 29 that he would unify Nigeria’s exchange rate.
*Reported by The Nation
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