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CBN Exchange Rates 2021 and Other Legitimate News Update

Filed in Articles by on April 8, 2021

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Are you looking for CBN Exchange Rates? The Nigerian naira over time is a cause of concern for Nigerians. The continuous rise and fall affect businesses in Nigeria. Every day, the CBN gives an update on the exchange rates of naira with other top currencies in the world.

In this article, we shall be discussing the CBN exchange rates for naira with other top currencies.

CBN Exchange Rates 2021 and Other Legitimate News Update

CBN Exchange Rate Intervention Plan

Reports indicate that the CBN has instructed bidders at its Secondary Market Intervention Sales (SMIS) to increase their bidding price to N380/$1 floor. The SMIS is the market where importers bid for forex using Letters of Credit and Form M.

Also, the central bank informed banks to only accept bids from N380/$1 and above. As such, it is no longer N360/$1. And this means that those who bid lower will not get any forex allocation. Also, transaction success in this market is based on bids.

This is essentially a huge attempt at unifying the naira. And it is another adjustment of the exchange rate by the CBN. Also, the CBN Governor had informed investors that the bank will be unifying the exchange rate towards what is being traded at the NAFEX market.

CBN Exchange Rate and the Role of SMIS

The SMIS window was created by CBN. And it is for importers to ease the pressure faced by businesses in the foreign exchange market. And this is through sales of foreign currency to authorized dealers (wholesale) or to end-users through Authorized dealers.

Also, note that businesses usually conduct their bid for forex at the SMIS window every two fortnight.

Current CBN Exchange Rate

Currently, rates are set at a floor of N391/$1. And it is at a ceiling of N395/$1. Thus bidders are expected to bid within that range. But, the higher the bid the better the chances of getting forex.

However, it is unclear if there were any buyers that bid above N360. This is because most of the importers were not informed of the changes in prices today. In February, the CBN has injected $218.41 million into the inter-bank retail Secondary Market Intervention Sales (SMIS).

The dollar sold at the time meant for only agricultural and raw materials sectors, is in continuation of its intervention in the inter-bank foreign exchange market.

Also, in May, the central bank surprised the market by injecting an estimated $90-$100million into the system.

Legitimate News Updates on CBN Exchange Rate

Liberalization and Development of the Foreign Exchange Market

Since the introduction of the Whole Sale Dutch Auction System (WDAS) on February 20, 2006, note. The liberalized Foreign Exchange Market witnessed unprecedented stability most of which include the following:

  1. Unification of exchange rates. This is between the Official and Inter-bank Markets and the resolution of the multiple currency problems.
  2. Also, facilitation of greater market determination of exchange rates for the Naira vis-a-vis other currencies

Gains with WDAS

The following are some of the gains of WDAS:

  1. Parallel market appreciation for the first time in 20 years.
  2. Also, the convergence of official and inter-bank rates. Thus unifying the two.
  3. Also, revision of the Foreign Exchange Manual
  4. Furthermore, the sale of Foreign Exchange to Bureaux-de-Change operators. And this is in an effort to increase access to foreign exchange to small end-users. Also, to bridge the supply gap. And develop the local Bureaux-de-Change (BDCs)

CSN Team.

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