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The Nigerian naira showed signs of appreciation against the United States dollar on the Investor & Exporter (I&E) forex window, closing at 793.70/$ on Wednesday. This marks an improvement from the previous week when it traded at N825/$ on the same window.
Data obtained from the FMDQ indicated that trading commenced at 778.07/$ and reached a high of 853/$ before settling at 793.70/$ at the close of trading. The total turnover for the day was recorded at $87.19 million.
At the parallel market, Bureau de Change operators reported that the dollar was bought and sold at N820 and N825, respectively.
In recent weeks, the Central Bank of Nigeria directed Deposit Money Banks to remove the rate cap on the naira at the I&E window, allowing the national currency to freely float against the dollar and other global currencies. This move aims to promote a more market-driven exchange rate system.
The CBN explained that all segments in the FX market have been collapsed into the I&E window, making it the sole platform for eligible FX transactions. It operates on a willing buyer, willing seller model, where entities with FX demand seek out others with FX to sell at mutually agreed-upon rates through authorized dealers.
The concept of the willing buyer and willing seller model ensures that rates are determined through mutual agreement between both parties.
The CBN clarified that Personal Travel Allowance (PTA), Business Travel Allowance (BTA), and other invisible transactions would continue to be accessed through banks at the prevailing market rate.
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