Central Bank of Nigeria has said that there is no immediate or future plan to devaluate or float the Naira. The apex bank in a statement signed by its Director Corporate Affairs said “There has been NO change in Nigeria’s exchange rate structure. The CBN has not floated the Naira. The exchange rate remains stable. Speculations and reports to the contrary are false”. But some analyst, foreign investors and currency speculators had speculated that the CBN was ending a system of multiple exchange rates. CBN in reaction to the speculations stated categorically that “Nothing has changed in Nigeria’s exchange-rate structure,” and the Naira’s value continues to be determined by trading in the Investors’ & Exporters’ FX Window.
The Investor & Exporters foreign exchange window, also know as the Nafex window, was introduced in 2017 as Nigeria sought to attract capital inflows by offering investors a market-determined Naira exchange rate. The central bank pegs an official rate — meant for government bodies and fuel importers — at a level about 20 per cent stronger than the market price. The Naira was little changed at N360.46 per dollar on the I&E market, and was N306.5 on the official window. Bonds rose slightly, with yields on one-year interbank T-bills falling five basis points to 13.93%.
Central bank Governor Godwin Emefiele, who was re-appointed for a second five-year term last month, says the current system, which includes restrictions on imports, is the best way to diversify Nigeria’s economy and boost manufacturing. The International Monetary Fund has in recent time commended the CBN’ exchange rate policy. On Monday, the IMF said it was, for the first time in almost 40 years, reviewing how it deals with members that have multiple exchange rates. “By limiting the circumstances in which Fund members may introduce and maintain multiple exchange rates, the multiple-currency practices policy aims to promote orderly exchange arrangements and a stable system of exchange rates,” it said.