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The Central Bank of Nigeria (CBN) on Wednesday unveiled the much-anticipated flexible foreign exchange framework, allowing the exchange rate of the naira to be determined by market forces of demand and supply, although the apex bank would step in whenever appropriate.
The release came after weeks of consultations with stakeholders including the banks, on the need for a more flexible forex market to, among other things, reduce pressure on the local currency and incentivize foreign investors.
Making the announcement in Abuja on Wednesday, CBN governor, Godwin Emefiele, said the bank will operate a single trading window, to be launched on Monday.
The new window will have about 10 primary traders, to be appointed by the bank. Each trader will have a minimum volume of $10 million, he said.
He said the new mechanism would enable businesses plan their portfolio effectively without fear of losses as a result fluctuation in exchange rates.
“We are optimistic that the steps we have taken today will further deepen the market and help get foreign exchange into the market. I will say to Nigerians be calm, there is no need to worry, everything is well,” Mr. Emefiele said.