The Central Bank of Nigeria has instructed Deposit Money Banks to eliminate the limit on the naira's exchange rate at the official Investors and Exporters' Window of the foreign exchange market. This will enable the national currency to freely fluctuate against the dollar and other global currencies.

This development occurred shortly after President Bola Tinubu pledged to consolidate the country's various exchange rates, and just days before the suspension and apprehension of CBN Governor Godwin Emefiele. Emefiele's unconventional monetary policies had posed challenges for investors and the economy.

This indicates a significant decrease of 40.97 percent in the value of the naira compared to the previous rate of 471/dollar at the I&E Window on Tuesday. Information from the FMDQ Exchange revealed that trading at the I&E forex window commenced at 473.83/$ and concluded at 664.04/$. The total recorded turnover amounted to $193.33 million.

In previous years, the naira consistently closed below N480/dollar at the I&E Window.

However, as of 9 pm on Wednesday, the CBN had not yet updated the I&E Window rate on its website.

On June 9, 2023, the central bank had quoted N463.38/$ as the I&E rate.

The CEO of a commercial bank confirmed this development to The PUNCH, stating that banks are now permitted to engage in forex trading at the I&E Window at any rate, with a maximum spread of N1 between the buying and selling rates.

"The CBN has informed banks that the rate cap has been removed at the I&E Window. Consequently, banks and customers are allowed to freely trade at any rate, provided there is a N1 difference between the buying and selling rates," stated the bank CEO.

The Central Bank of Nigeria (CBN), in a statement issued on Wednesday and signed by Dr. Angela Sere-Ejembi, the Director of Financial Markets, officially confirmed significant modifications to the functioning of the foreign exchange market.

The statement issued by the Central Bank of Nigeria stated, "The Central Bank of Nigeria hereby notifies all authorized dealers and the public at large about the immediate changes in the Nigerian Foreign Exchange Market: The elimination of segmentation, resulting in the consolidation of all segments into the Investors and Exporters window. Applications for medical expenses, school fees, BTA/PTA, and SMEs will continue to be processed through deposit money banks."

The CBN further stated that trading hours for transactions will be between 9am and 4pm, Nigerian time.

On Wednesday, the parallel market recorded the naira closing at 757/dollar. Currency dealers in Lagos, Abuja, and Lagos airport reported that the naira was being sold and bought at 757 and 750, respectively. They noted that the developments in the official market were impacting the parallel market.