ABUJA, NIGERIA – The Central Bank of Nigeria, CBN, has announced on Wednesday, June 14, 2023, that it will now allow commercial banks to trade foreign exchange at any rate.
This significant change in policy comes in the wake of the suspension of Godwin Emefiele, the former Governor of the CBN.
The new policy will bring a shift in the foreign exchange market and may have wide-ranging implications for the Nigerian economy.
Critics have previously accused the CBN under Emefiele’s leadership of heavy-handed management of the exchange rate, which they argued distorted the market.
The recent change effectively ends the official fixed exchange rate policy, allowing the foreign exchange rate to be determined by market forces.
This move could stimulate increased trading activity and potentially attract foreign investors.
However, it could also lead to increased volatility in the value of the Nigerian Naira.
This policy shift represents one of the first major changes at the CBN following Emefiele’s suspension.
It remains to be seen how the new leadership will navigate the potential challenges this liberalised approach to foreign exchange could present.
