CBN Forex Policy Is a Great Move

The Central Bank of Nigeria (CBN) has updated its policy and we need to commend the apex bank. In a memo dated Nov 30, 2020 (see below), the bank reversed its policy, making it possible that remittance can be wired into a domiciliary account in Nigeria, with the recipient having access to the money in the foreign currency (say US dollars).

In an earlier directive, the bank had removed that flexibility, pegging it around N388 per US$1, and that necessitated an uncommon rally against the Naira in the global currency market, hitting close to N500 per dollar. What happened was simple: people moved out of the formal system, and went informal and that pulled tons of supply in the local market.

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