The Central Bank of Nigeria has said that it will be implementing a new foreign exchange policy with immediate effect.
The new policy is the result of a review undertaken by the central bank of ways to stop the widening gap between inter-bank foreign exchange and parallel market rates. The inter-bank rate, the official exchange rate approved by the CBN, stood at about N308.50 to the dollar, the rate at the parallel market, which is readily accessible by most Nigerians, rose to as high as N510 to the dollar last week.
In response, the central bank will provide additional funding to banks to help them “meet the needs of Nigerians” on a range of services including travel, medical needs and school fees. “All banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements,” the CBN writes in a statement.
“The bank therefore encourages market participants to assist in ensuring that these new measures engender the preservation of our external reserves, stability of our financial system, and growth of our economy to the benefit of all Nigerians.”
By Alex Hamilton