Private Industry, Economists Support CBN as the Naira Drops to 664/$.

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To allow for a free float of the local currency against the dollar and other major world currencies, the Central Bank of Nigeria has instructed Deposit Money Banks to eliminate the rate cap on the naira at the official Investors and Exporters’ Window of the foreign exchange market.

The organized private sector and economists applauded the CBN’s decision to float the currency, claiming that it would unify the country’s varied exchange rates and sanitize the foreign exchange market.

The change from the old practice, where rates were set by the Central Bank of Nigeria, allows buyers and sellers of foreign currency in the official FX markets to offer rates they feel comfortable with.

As a result of the development, the  naira depreciated to N664.04/dollar at the close of trading at the I&E Window on Wednesday, according to data from the FMDQ Securities Exchange.

That implies a 40.97 per cent decline in the naira value compared to the 471/dollar rate which the national currency closed at the I&E Window on Tuesday.


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