CBN Gives Bank the Power to Trade Forex at a Free Rate of N699 to N750 Against the Dollar

The Central Bank of Nigeria has given commercial banks permission to trade foreign exchange freely at any rate.

The approval implies that banks can now sell foreign currency at a market-determined rate.

According to news outlets, several banks have set the USD to Naira rate at N699 to N750, implying that Nigeria now has a freely floating exchange rate in line with President Bola Ahmed Tinubu's commitment to unify the rate.

Dr. Andrew Nevin, Advisory Partner & Chief Economist at PricewaterhouseCoopers (PwC), said in an Arise Television interview on Wednesday that the unification of foreign exchange rates will have a significant influence on the economy by increasing investment opportunities in Nigeria.

“What has been happening is that CBN is taking dollars from the Federation’s account and giving to privileged individuals at N411 to US dollar while the real price is N700 to N750 to the Dollar, we don’t really know because they’ve removed price transparency.

”What happens is that the state government cannot pay their pensioners. That fundamental issue will be addressed by the development. Now the state government will get full value for its dollar.

“It will have a dramatic impact on the fiscal structure of the country when we stop giving the dollar to privileged individuals. We get better investment, more fair use of the country’s resources, and improved business environment, this will strengthen Nigeria’s currency”, he stated.

Nigeria has maintained an official exchange rate for years, even as the country's FX reserves have reached new lows. While the CBN kept its rate of $1/N462 in place. But with this development, experts believe that this policy will strengthen the economy.