CBN moves closer to unifying exchange rates, adds NAFEX

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The Central Bank of Nigeria moves closer to unifying different exchange rates in the country as it officially added the Nigerian Autonomous Foreign Exchange Rate Fixing Methodology (NAFEX) on its website.

NAFEX was introduced by the current CBN management in 2017, and is the official rate for exporters, investors, and purchasers of forex and rates. It is largely market-driven.

The update made on Tuesday morning shows Naira is currently priced at N410.25/$1 with NAFEX rate indicated.

This also means that for official transactions, Nigeria will be adopting the NAFEX rates.

There is also a Small and Medium Enterprises Equity Investment scheme (SMEIS) window where forex is sold to importers, and the Bureau De Change (BDC) window where forex is sold to retailers.

The unofficial window is the parallel market which is also called the black market.

It is also believed that the CBN move is coming as a condition for International Monetary Fund loan (IMF) $3.4 billion loan approval.

The International Monetary fund (IMF) had advised the Nigerian government to fast track the unification of the exchange rates to achieve desired economic growth.

Last month, while approving the sum of $3.4 billion as emergency financial support for Nigeria, Mitsuhiro Furusawa, the Deputy Managing Director/acting chair of IMF, urged the country to expedite action towards a more unified and flexible exchange rate.

On Tuesday morning, at the NAFEX window naira was trading at N411.25/$1 the same rate it closed on Monday according to data from FMDQ securities.

While Data from Aboki fx shows Naira is currently at N486.41 at the Parallel market with BDC rate at N485/$1.

Meanwhile the CBN has issued new licence requirements for payment systems, increasing the minimum capital requirements for Payment Solutions Service Providers (PSSPs) from N100 million to N250 million.

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