The termination of FX allocation to Bureau De Change operators, according to Mr Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), has helped the Naira remain stable at the Investors and Exporters Window (I&E).
Emefiele spoke at the CBN’s 32nd Seminar for Finance Correspondents and Business Editors on Thursday in Akure, Ondo.
Mr Edward Adamu, the CBN’s Deputy Governor for Corporate Services, delivered his speech virtually.
According to NAN, the seminar’s theme is “Exchange Rate Management and Economic Diversification in Nigeria: The ‘PAVE’ Option”.
“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,” Emefiele said.
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He explained that the Bank set up an Investors and Exporters Window (I&E) to allow for the purchase and sale of foreign currency at market rates.
The naira maintained relative stability in 2021, according to the CBN, at ₦411.50/US$ in August but declined to ₦414.33/US$ in December.
The currency rate was ₦416.98/US$ in February 2022. For a long time, the CBN has used a controlled float exchange rate regime.
To maintain exchange rate stability, the system has attempted to intervene in the market by supplying foreign exchange.
Emefiele listed other measures taken by the CBN that had yielded results. He said one of them is a collaboration with commercial banks to go after Nigerians who bought dollars under the guise of travelling abroad but ended up “round-tripping”.
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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, licensing of new BDCs was suspended. The CBN also introduced the ‘Naira 4 Dollar Scheme’ to encourage diaspora remittances.
Emefiele noted that the ‘Naira for Dollar’ scheme had aided remittance inflows, which had increased significantly.
“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.
The event, according to him, continued to strengthen Business Editors’ and Financial Correspondents’ expertise and comprehension of CBN policies and efforts.
Editors and financial correspondents, he said, were expected to play a key role in raising public awareness about the need for reform initiatives. He stated that the seminar’s topic was quite timely.
