The Investors and Exporters (I&E) window will be renamed the Nigerian Foreign Exchange Market (NFEM) in the coming days as the Central Bank of Nigeria (CBN) battles to return sanity to the FX market in Africa’s largest economy.
While delivering a lecture titled, “Diaspora Remittances and Nigeria Economic Development” to members of the Executive Intelligence Management Course (EIMC) 16 at the National Institute for Security Studies, Abuja, the acting CBN governor said, Nigerian Foreign Exchange Market, “is the sole market we acknowledge.”
Recalled that on June 14, 2023, the apex bank through its acting governor Folashodun Shonubi announced the abolition of the segmentation in the foreign exchange market and collapsed all segments and rates into the I&E window.
Established in 2017, the I&E window is now regarded as the sole official forex market, where the price is based on ready-to-buy and ready-to-sell FX customers on prevailing market circumstances.
After the CBN abolished the multiple exchange rate in what some people described as floating the Naira, the Nigerian currency its worst exchange rate against the US Dollar, falling to $/NGN955 at the parallel market while the I&E rate is determined by supply and demand trading at between $/N760 – $/799.
Vows to sanction erring banks for FX racketeering
Meanwhile, the apex bank boss has vowed to sanction any commercial banks that engage in illegal sales of forex.
Following speculations that some bank officials are selling dollars to BDC operators, the acting CBN governor said a commission had been formed to pay unscheduled visits to banks accused of unlawfully selling dollars.
He also acknowledged that the diversion of diaspora remittances to unofficial markets such as the black market has been one of the reasons the naira crashed against the dollar.
Recalled that there was an incentive called Naira 4 Dollar scheme when Godwin Emefiele was in office. It was designed to persuade individuals to engage in formal market transactions by granting a N5 refund per dollar remitted through the official market.
The scheme was discontinued because people still prefer the parallel market rate.