Commercial banks are now permitted to trade foreign currency at any rate without restriction by the Central Bank of Nigeria.
Banks can now sell foreign currency at a rate set by the market thanks to the authorization.
According to information obtained by Obasanjonews24, a few banks have set the USD/Naira exchange rate at between N699 and N750, indicating that Nigeria is now using a freely floating exchange rate in accordance with President Bola Ahmed Tinubu’s promise to converge the rate.
PricewaterhouseCoopers (PwC) Advisory Partner and Chief Economist Dr. Andrew Nevin responded to the news in an interview with Arise Television on Wednesday, saying that the move will have a significant impact on the nation by increasing investment opportunities in Nigeria.
The CBN has been taking money from the Federation’s account and giving it to privileged people at a rate of N411 to the US dollar, even though the real rate is between N700 and N750 to the dollar; we don’t really know because they have removed price transparency.
What takes place is that the state government is unable to pay its pensioners. The development will take care of that essential problem. Now the state government will get the most out of every dollar spent.
“When we stop giving the dollar to privileged individuals, it will have a dramatic effect on the fiscal structure of the nation. This will strengthen Nigeria’s currency as we attract better investment, more equitable use of the nation’s resources, and an improved business environment, he said.
Nigeria has kept its official exchange rate under strict control for years despite the fact that its foreign exchange reserves have reached record lows. The CBN continued to maintain a fictitious exchange rate of $1/N462.
