Naira traded at N791 to the dollar, but fell to N664 at the I&E window

 By: News Peddlers 

Naira and Bollar 

The Naira declined against the dollar on Wednesday in the window for investors and exporters, trading for N664.04 to $1.

The value of the naira decreased by 40.78% from Tuesday's exchange rate of N471.67 to $1.

Following an order from the Central Bank of Nigeria (CBN) to banks, the rate cap on the naira at the Investors and Exporters' Window was removed.

The rule would permit the country's currency to freely fluctuate against the dollar and other major world currencies.

On Wednesday, the open indicative rate was N473.83 to the dollar.

Before it ended at N664.04, the exchange rate for the day's trade reached a high of N791 to $1.

During the day's trade, the naira fell as low as 461 to the dollar.

At the official Investors and Exporters window, $193.33 million worth of transactions took place on Wednesday.

The CBN's order for a free naira float, according to Ndubisi Nwokoma, director at the Centre for Economic Policy Analysis and Research at the University of Lagos, it is a positive step.

"The CBN decision is a good development, hoping that unnecessary arbitrage (round-tripping) would be eliminated from the market. We expect that the foreign exchange rate will trend downwards when foreign capital inflow increases, following these,” Mr Nwokoma noted.

The economic expert explained that the negative side “is that many assets or foreign sectors related to naira prices, like external debt, among others, will be adjusted upwards” with minimal effects on inflation.

“Inflationary effects may not be much, given that many economic agents had been sourcing for their foreign exchange at the parallel market before now,” Mr Nwokoma stated.

(NAN)