Naira Recovers, Exchanges For N742/$
The naira rebounded yesterday to N742/$ in the Investors and Exporters (I&E) Window- official market.
The rate represents N53/$ gain from at N795.2/$ it closed on Monday. The rate at the parallel market was N812/$, which was stronger than N820 it closed on Monday.
Data from FMDQ Exchange indicated a turnover of $156 million.
The Central Bank of Nigeria (CBN) unified exchange rates into the I&E Window and allowed market forces to determine exchange rate for the naira.
The floating of the naira, which ended decades of multiple exchange rate regime was one of the first policy pronouncements by President, Bola Tinubu.
On the inauguration day, he announced series of reforms many considered long overdue, including a directive to the Central Bank of Nigeria (CBN) to unify exchange rates.
The multiple exchange rates – the International Air Transport Association (IATA) rate, parallel market rate, Interbank Exchange Rate and Bureaux De Change (BDC) rate were collapsed into the Investors & Exporters (I&E) Window.
The policy shift entailed that all dollar applications for medicals, school fees, Business Travel Allowance/Personal Travel Allowance, and SMEs are now processed through the I&E window- where rates are determined by market forces.
The I&E window was activated in June 2017, and represents the broader forex market, where dollars sourced from autonomous sources are traded between Authorised Dealers, Clients and the CBN.
This forex window is also the underlying market for the FMDQ Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) benchmark .
The rate at the I&E window has come to represent the official rate for the naira after the Central Bank of Nigeria (CBN) abolished multiple exchange rates in the economy.
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