- Invisible transactions would continue to be accessed through the banks at the prevailing market rate
- CBN had directed Banks to remove the rate cap on the naira at the I&E window to allow for a free float of the naira against the dollar
The naira appreciated against the United States dollar on the Investor & Exporter forex window on Wednesday, closing at 793.70/$.
A spot exchange rate of N853 to the dollar was the highest rate recorded within the day’s trading before it settled at N793.70.
On Wednesday, $87.19 million was traded at the investor’s and exporters’ window.
The local currency had earlier traded at N825 a week earlier on the I&E window.
According to figures obtained from the FMDQ, the trading, which commenced at 778.07/$ on Wednesday reached a high of 853/$ before closing at 793.70/$.
The trading also recorded a turnover of $87.19m as of the end of trading.
The Central Bank of Nigeria, in recent weeks, directed Deposit Money Banks to remove the rate cap on the naira at the I&E window to allow for a free float of the national currency against the dollar and other global currencies.
The banking regulator explained its new forex operation in its report on ‘Understanding the operational changes to the foreign exchange market’.
By collapsing all segments in the FX market into the I&E window, it said this meant all eligible FX transactions in the market would only be done via the I&E window, as all other windows ceased to exist.
“The I&E market functions by a willing buyer, willing seller system, where an entity with demand for FX seeks out another entity with FX to sell at an agreed price through an authorised dealer,” the CBN stated.
On the concept of the willing buyer and willing seller model, it explained that the rates were mutually agreed by both parties.
The CBN said PTA, BTA and other invisible transactions would continue to be accessed through the banks at the prevailing market rate.
The Central Bank of Nigeria had announced Tuesday and Wednesday next for its Monetary Policy Committee Meeting, where decisions will be made on the Country’s economic challenges.