By Chioma Obinagwam
The Chief Executive Officer (CEO) of Oando, Wale Tinubu has said that he sees a possible convergence of the Foreign Exchange (Forex) rates in the inter-bank window and the parallel market, owing to the multiple windows provided by the Central Bank of Nigeria (CBN) to ease access to Forex.
“It is quite likely that the CBN’ll converge the rates looking at the various windows provided recently for access to Forex. There’s so much value for foreign investors,” he said in Lagos recently.
The CBN, which is also the country’s apex bank, had in its bid to increase access to Forex in addition to closing the gap between the exchange rate at the inter-bank window(official) and the parallel market(unofficial), created more windows.
The additional windows include Business Travel Allowance(BTA), Personal Transport Allowance(PTA) and the newly created Investor-Exporter window.
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Tinubu seem not far from the truth in his assertion, since the CBN is close to achieving some form of convergence in the rates between the official and non-official window looking at what it was in December 2016 and what it is now.
In retrospect, naira plummeted significantly against the dollar in December, 2016 as Forex rate closed at US$1 to N315 in the interbank window compared to the US$1 to N490 in the parallel market.
However, with the consistent intervention of the apex bank in the Forex market, the exchange rate is currently at $1 to N305.6 at official window and $1 to N365 at the parallel market as at June 10, 2017.
Nevertheless, in achieving further convergence, experts suggest that the CBN should continue to allow market forces and transparency to prevail at the newly created ‘Investors-Exporters Forex window.