Naira closes at N791/$ in official market

The naira yesterday recorded marginal gain of N1 to close at N791/$ in the official Investors and Exporters (I&E) window.

The local currency closed at N792/$ at the official window on Monday however continued depreciation at the parallel market where it closed at N870/$.

Analysts said the pressure on the naira was triggered by continuous dollar crush and illiquidity in the parallel market.

They said the CBN should deepen dollar liquidity in the official market to reduce pressure at the parallel market.

Data from FMDQ Exchange showed that the total turnover at I&E window stood at $51 million by the close of market.

The Central Bank of Nigeria (CBN) unified all exchange rates into the I&E window and allowed market forces to determine exchange rate for the naira.

The floating of the naira, which officially ended decades of multiple exchange rate regime was one of the first policy pronouncements by Nigeria’s newly elected President, Bola Ahmed Tinubu.

On the inauguration day, he announced series of bold reforms many considered long overdue, including a directive to the Central Bank of Nigeria (CBN) to unify all exchange rates.

The multiple exchange rates – the International Air Transport Association (IATA) rate, parallel market rate, Interbank Exchange Rate and Bureaux De Change (BDC) rate were collapsed into the Investors & Exporters (I&E) window.

The policy shift entailed that all dollar applications for medicals, school fees, Business Travel Allowance/Personal Travel Allowance, and SMEs are now processed through the I&E window- where rates are determined by market forces.

The I&E window was activated in June 2017, and represents the broader forex market, where dollars sourced from autonomous sources are traded between Authorised Dealers, Clients and the CBN.

This forex window is also the underlying market for the FMDQ Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) benchmark .

The rate at the I&E window has come to represent the official rate for the naira after the Central Bank of Nigeria (CBN) abolished multiple exchange rates in the economy.