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Mr Godwin Emefiele, Governor, Central Bank of Nigeria (CBN) says the discontinuation of FX allocation to Bureau De Change operators had helped the Naira to remain stable at the Investors and Exporters Window (I&E) window.
Emefiele said this at the 32nd Seminar organised by the CBN, for Finance Correspondents and Business Editors, on Thursday in Akure, Ondo with the theme: “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.
He said that the Bank established an Investors and Exporters Window (I&E) to allow for the purchase and sale of FX at the prevailing market rate. According to CBN, in 2021, the naira maintained relative stability at N411.50 to a dollar in August but depreciated to N414.33 in Dec. 2021.
As of Feb 2022, the exchange rate stood at N416.98 per greenback. The CBN; for quite some time now has operated a managed float exchange rate system. Under the system, in line with its exchange rate stability mandate, it has strived to intervene in the market by supplying foreign exchange.
Emefiele listed other measures taken by the CBN that had yielded results. He said that they include partnerships with commercial banks to go after Nigerians who falsely bought dollars under the pretence of travelling abroad and ended up round-tripping.
“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.” He said that remittance inflows had been supported by the ‘Naira for Dollar’ scheme, and there had been a surge in the inflows.
“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. Emefiele said the seminar had continued to deepen the knowledge and understanding of Business Editors and Financial Correspondents about CBN’s policies and initiatives.
He said that editors and finance correspondents were expected to play a critical role in public sensitisation towards the success of reform efforts. He said the theme of the seminar was very pertinent.
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