Why naira is stable at investors, Exporters Window – Emefiele

March 24, (THEWILL) – The Central Bank of Nigeria (CBN), says the discontinuation of FX allocation to Bureau De Change operators has helped the Naira to remain stable at the Investors and Exporters (I&E) window.

Governor of the Bank, Godwin Emefiele, made this known on Thursday, at the 32nd Seminar organised by the CBN, for Finance Correspondents and Business Editors, in Akure, Ondo State capital.

Speaking virtually through Edward Adamu, the Deputy Governor, Corporate Services, CBN, Emefiele, said, “As a result of our demand management policy, the naira has remained largely stable at the I&E window, particularly since the discontinuation of FX allocation to Bureau De Change operators, along with the convergence between the CBN and NAFEX rates. Banks are now able to meet the demands of their customers seeking forex for SMEs, school fees, medical and PTAs.”

He said the Bank established an Investors and Exporters Window (I&E) to allow for purchase and sale of FX at prevailing market rate.

According to CBN, in 2021, the naira maintained relative stability at N411.50/US$ in August, but depreciated to N414.33/US$ in Dec. 2021. As at Feb, 2022, the exchange rate stood at N416.98/US$.

The CBN for quite some time now has operated a managed float exchange rate system. Under the system, in line with its exchange rate stability mandate, it has strived to intervene in the market by supplying foreign exchange.

Trending

THEWILL EDITORIAL: APC And Recent Defections

Emefiele listed other measures taken by the CBN that had yielded results, which among others, include partnership with commercial banks to go after Nigerians, who falsely bought dollars under the pretence of travelling abroad and ended up round tripping.

“The Central Bank of Nigeria had also sanctioned Bureau De Change (BDC) operators for illegal forex trading and discontinued the sale of forex to the Bureau operators in Nigeria. In addition, licencing of new BDCs was suspended. The CBN also introduced the ‘Naira 4 Dollar Scheme’ to encourage diaspora remittances”, he said.

He said remittance inflows had been supported by the ‘Naira for Dollar’ scheme, and there had been a surge in the inflows.

“It is heartening to note that these policies are yielding positive results in terms of meeting genuine demand for foreign exchange and exchange rate stability”, he said, adding that the seminar had continued to deepen the knowledge and understanding of Business Editors and Financial Correspondents about CBN’s policies and initiatives.

Emefiele charged editors and finance correspondents to play a critical role in public sensitisation towards the success of reform efforts.