Dollar Rises as CBN Directs Instructs Banks to trade at market-determined rates

Dollar exchange rate continues to rise at the investors and export (I&E) window, this is as the Central Bank directs banks to sell at a market-determined rate.

ENigeria Newspaper reports that the directive by the CBN saw a hike in the price of dollar which is now trading between N75o – N755 per dollar in the I&E window which is the official market window for trading on dollar.

The sudden hike in price indicating a new dollar rate has sparked panic demand for the currency in Nigeria and there are indications that scarcity looms.

Sources familiar with the matter told TheCable on Wednesday that the Central Bank of Nigeria (CBN) has directed commercial banks to sell forex freely at market-determined rates.
The market rate is said to be a “willing buyer, willing seller” arrangement.
This implies that Nigeria has eased its control of the naira, allowing the local currency to freely float.

A free-floating exchange rate occurs when a government allows the exchange rate to be determined purely by market forces and there is no attempt to ask the central bank to influence the external value of the exchange rate.
The development comes days after the suspension of Godwin Emefiele as CBN governor by President Bola Tinubu.

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Folashodun Adebisi Shonubi, deputy governor, operations directorate, is expected to act as the CBN governor pending the conclusion of an investigation ordered by the president into Emefiele’s activities.
he Department of State Services (DSS) later announced that Emefiele is currently in its custody for “some investigative reasons”.

The rise in exchange at the I&E official window portends danger, experts told this newspaper.