CBN grants banks freedom to trade dollars at any rate
The Central Bank of Nigeria has granted freedom to commercial banks to trade foreign exchange at any rate.
This means that banks now have the autonomy to sell forex at a market-determined rate.
Following the development some banks have reported to have pegged the USD to Naira rate at N699 to N750, suggesting that Nigeria is now operating a freely floating exchange rate in line with President Bola Ahmed Tinubu’s pledge to unify the rate.
Dr. Andrew Nevin, the Advisory Partner & Chief Economist of PricewaterhouseCoopers (PwC), while reacting to the development in an Arise Television interview on Wednesday, said the unification of foreign exchange rates will impact the country dramatically by boosting 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.
