CBN readjusts exchange rate to N645 to a dollar as black and official market rat…

• The Central Bank of Nigeria has readjusted the exchange rate on its website
• The apex bank pegged the naira at N645 to a dollar after it traded at N770 to a dollar the previous day
• The new exchange rate peg by CBN follows Nigeria’s plan to unify its exchange rate

The Central Bank of Nigeria (CBN) readjusted the exchange rate on its website to N645 to a dollar following the currency‘s fall in both the black and official markets on Tuesday, June 20, 2023.

At the close of trading, the Nigerian currency traded at N770 to a dollar at the Investors and Exporters (I&E) window, unifying for the first time in eight years.

CBN readjusts the exchange rate after the fall

The apex bank had pegged the local currency at N545 to the dollar as the naira rallied N660 to a dollar in the I&E window.

The latest readjustment by CBN shows the volatility of the naira has been subjected to since the Nigerian government began floating it.

On Wednesday, June 14, 2023, the CBN announced the free float of the naira, meaning banks could trade forex freely.

Nigeria is seeking to unify its chaotic exchange rate market, which is blamed for the free fall of the local currency.

According to data on the CBN website, the new exchange range takes effect from Friday, June 16, 2023.

Prices shoot up due volatile exchange rate

The new exchange rate policy has increased the price of goods and services, including international airfares, with international airlines announcing that they will sell tickets at N770 per dollar.

Experts say the dollar will continue to rise and fall until it finds an equilibrium between the official and parallel markets.

Others say the apex bank may readjust the price in the coming days as market forces take their toll.

Reports say that on Wednesday, June 21, 2023, the naira recovered to trade at N758 to a dollar, a 2.82% appreciation compared to the previous day’s trading session, where it was valued at N780 to a dollar.

“N800/$”: Black market traders sell dollars cheaper than banks as exchange rates near the convergence

Earlier, Legit.ng reported Since the Central Bank of Nigeria’s (CBN) decision to float the naira in the official market, the multiple exchange rates are beginning to merge.

Legit.ng observed that the Naira closed at nearly the same rate across the Investors and Exporters window, the Peer-to-Peer market, and the black market on Monday, June 19, 2023.

Data from FMDQ securities, where the naira is officially exchanged, shows that the naira against the US dollar closed at N770.38/$1 at the I&E segment.

Source: Legit.ng