The Central Bank of Nigeria (CBN) has on Tuesday, nullified the official exchange rate regime of N197 per dollar, as it announced another flexible exchange rate aimed at making foreign currencies more accessible.
Speaking on the development at the end of the Monetary Policy Meeting, in Abuja, the Governor of the CBN, Mr. Godwin Emefiele, explained that the Apex Bank took the measure following severe pressures on external reserve and foreign exchange supply crisis.
The governor also said the Monetary Policy Rate, MPR, was retained at 12 per cent; Cash Reserve Ratio, 22.5 per cent; and Liquidity Ratio, 30 per cent.
The apex bank’s Monetary Policy Committee (MPC), which made this decision, chose to retain its Monetary Policy Rate, MPR, at 12 per cent, Cash Reserve Ratio, CRR, at 22.5 per cent and Liquidity Ratio at 30 per cent, Vanguard reports.
The CBN Governor said: “the MPC voted unanimously to adopt a flexible exchange rate policy to restore the automatic adjustment properties of the exchange rate,” adding that it voted also to “retain a small window for funding critical transactions” and that “details of operations of the market would be released by the Central Bank at the appropriate time.”
Also speaking on Tuesday, some analysts at Nairametrics said:
“It is unclear how this will work as the CBN will need to put a massive structural operational framework in place to ensure this works perfectly.
“A market determined rate will also require strong regulations around a market that involves everyone with prices that are market determined.
“One expects the black market to disappear as all you need to do is walk to the bank and ask to buy forex at the market rate.