Updated: CBN says no change in exchange rate structure - BUSINESSDAY

JUNE 13, 2019

…denies stoppage of official rate publication on website
...injects $210m into forex market

The Central Bank of Nigeria (CBN) on Wednesday denied stopping the publication of official exchange rate on its website, saying there’s no change in Nigeria’s exchange rate structure.

“There has been NO change in Nigeria’s exchange rate structure,” CBN announced on its twitter handle at 12:15am, June 12, 2019.

The apex bank was responding to its earlier signal of exchange rate convergence as it declared its official rate “market determined”.

The move, if implemented, will allow the naira to weaken past its official rate as it gradually unwinds its regime of multiple exchange rates.

Naira traded and closed at the rate of N360.63 per dollar at the investors and exporters foreign exchange window and N360/$ at the Bureau De Change (BDC)/parallel market.

The regulator usually publishes on its website the inflation rate numbers, exchange rate to USD, Monetary Policy Rate (MPR), and crude oil numbers, but as at Tuesday, the exchange rate numbers had been removed and replaced with “the naira exchange rate is market determined”.

However, the CBN on Wednesday removed the “market determined” on its website and replaced it with “Exch. Rate (USD) N306.95”.

Godwin Emefiele, governor of the CBN, had last month said Nigeria does not operate multiple exchange rates but has multiple foreign exchange windows.

Nigeria’s foreign exchange windows include the investors and exporters forex window, the inter-bank window, the official, the window for Small and Medium Enterprises (SMEs), business travel allowance (BTA) and personal travel allowance (PTA).

Emefiele said the foreign exchange has substantially converged at N360 per dollar at the Nigerian Autonomous Foreign Exchange (NAFEX) window and BDC segment of the market.

Meanwhile, the CBN on Tuesday injected a total of $210 million into the inter-bank foreign exchange market.

Figures obtained from the CBN indicated that authorised dealers in the wholesale segment of the market were offered the sum of $100 million, while the Small and Medium Enterprises (SMEs) segment received the sum of $55 million. The sum of $55 million was allocated to customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others.

Confirming the figures, Isaac Okorafor, director, Corporate Communications Department of the CBN, reaffirmed the bank’s commitment towards ensuring stability in foreign exchange market.

It will be recalled that at the last intervention on Friday, June 7, 2019, the bank injected the sum of $294.7 million and CNY31.4 million into the Retail Secondary Market Intervention Sales (SMIS) segment.

Gross official reserves increased by US$330 million in May to US$45.12 billion. It has risen to $45.17 billion at June 6, 2019.

Hope Moses-Ashike & Endurance Okafor


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