The new management of the Central Bank of Nigeria (CBN) yesterday adopted a clean float foreign exchange management, a choice it had previously disallowed, in keeping with President Bola Ahmed Tinubu’s pledge to implement monetary policy reforms, particularly to ensure a single exchange rate for Nigeria.
In a press statement signed by its director in charge of financial markets, Angela Sere-Ejembi, the apex bank announced immediate changes to operations in the Nigerian Foreign Exchange (FX) market.
In a curious move, the central bank abolished its hitherto multiple exchange rate windows and collapsed them into the business-based Investors and Exporters (I&E) window.
“All segments are now collapsed into the Investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks,” Dr Sere-Ejembi said in a message to authorised dealers of forex.
In his inaugural speech on May 29, President Tinubu said the Central Bank of Nigeria must work towards a unified exchange rate. He also stressed the fact that the nation’s Monetary Interest Rate, currently at 18.5 percent, is anti-people and unproductive. “Interest rate is currently too high. It’s anti-people, anti-business. We have to work on all of those,” he stated.
It is not clear yet how he would convince members of the Monetary Policy Committee of the CBN to loosen the official interest rate benchmark to achieve his campaign promise. The central bank under suspended governor, Godwin Emefiele, has insisted it would continue on a tightening lane to tame Nigeria’s rising demand-pull inflation currently at 22.22 percent.