The exchange rate for the US dollar to the Nigerian Naira on August 23, 2023, is now available.
Today’s rates, sourced from FMDQ Security Exchange, indicate that the Naira started the trading day at ₦781.49 for every dollar on Tuesday, August 22, and ended the day at ₦770.72 per US dollar.
Previously, on June 14, 2023, the Central Bank of Nigeria (CBN) unified all sections of the foreign exchange market. In an announcement, the CBN mentioned that all foreign exchange windows would merge into the Investors & Exporters (I&E) window.
This decision, as explained by the leading bank, was a pivotal move in modifying the Nigerian foreign exchange market operations. The changes included:
- Elimination of Market Segmentation: All operations now fall under the I&E window. Procedures for medicals, tuition, travel allowances, and small to medium enterprises continue via regular banks.
- Return of the “Willing Buyer, Willing Seller” Approach: This window will follow the established guidelines from the circular dated April 21, 2017. All permitted activities can access foreign currency via this window.
- Operational Rate Standards: All government-linked transactions will follow the averaged rate of the prior day’s I&E window trades, precise to two decimals.
- Trading Limit Changes: FX oversold position trading limits are now abolished, allowing short position hedging using OTC futures. The overbought position limits stand at zero.
- Introduction of Two-Way Quotes with Defined Spread: The bid-ask spread is now set at N1. A Central Counter Party (CCP) will clear every transaction.
- Order Book Reintroduction: This move ensures clear order visibility and smooth trade execution.
- Trading Operational Hours: Trades will take place from 9 a.m. to 4 p.m., Nigeria local time.
CBN has also hinted that more detailed guidelines about these operational shifts will be relayed to certified dealers and the general public soon.
These alterations in the Nigerian FX market’s functioning signify a move towards a more liberal control of the Naira, letting it find its value based on market dynamics. To clarify, a free-floating exchange rate system lets market forces set the rate, without direct central bank interventions.
Note: This article relies on rates provided by the FMDQOTC and various media outlets for parallel market rates. The rates at which one might buy or sell forex might differ from the figures mentioned here