Monday, March 4, 2024
HomeBanking & FinanceNaira WatchNaira closes at  N791/$ in I&E Window

Naira closes at  N791/$ in I&E Window

The naira on Tuesday recorded marginal gain of N1 to close at  at  N791/$ in the Investors and Exporters (I&E) window- official market.

The local currency closed at N792/$ at the offiail window on Monday however continued depreciation at the parallel market where it closed at N870/$.

Analysts said the pressure on the naira was triggered by continuous dollar crush and illiquidity in the parallel market.

They said the CBN should deepen dollar liquidity in the official market to reduce pressure at the parallel market.

Data from FMDQ Exchange showed that the total turnover at I&E window stood at $51 million by the close of market.

The Central Bank of Nigeria (CBN) unified all exchange rates into the I&E window  and allowed market forces to determine exchange rate for the naira.

The floating of the naira, which officially ended decades of multiple exchange rate regime was one of the first policy pronouncements by Nigeria’s newly elected President, Bola Ahmed Tinubu.

On the inauguration day, he announced series of bold reforms many considered long overdue, including a directive to the Central Bank of Nigeria (CBN) to unify all exchange rates.

The multiple exchange rates –  the International Air Transport Association (IATA) rate, parallel market rate, Interbank Exchange Rate and Bureaux De Change (BDC) rate were collapsed into the Investors & Exporters (I&E) window.

The policy shift entailed that all dollar applications for medicals, school fees, Business Travel Allowance/Personal Travel Allowance, and SMEs are now processed through the I&E window- where rates are determined by market forces.

The I&E window was activated in June 2017, and represents the broader forex market, where dollars sourced from autonomous sources are traded between Authorised Dealers, Clients and the CBN.

This forex window is also the underlying market for the FMDQ Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) benchmark .

The rate at the I&E window  has come to represent the official rate for the naira after the  Central Bank of Nigeria (CBN) abolished multiple exchange rates in the economy.

- Advertisment -spot_img
- Advertisment -spot_img

Most Popular

Recent Comments