Nigeria Official Floats the Naira
CBN has removed her hands from foreign Exchange allowing the market forces to determine the price of the naira against the dollar
Business Benefits
1. All cards will work: the banks are now allowed to determine the price of the foreign exchange, and they don’t need to wait for CBN to settle international transactions
2. Foreign direct investment will jump into Nigeria. Remember the market rose to a 15-year high when Emefile was suspended. Investors will come to Nigeria because they will determine when to bring in their money and when to take it out.
3. Exporters can now get the face value of the products they export, this will bring in more dollars.
4. BTA Form A and Form Q will now be priced at market price.
5. It will necessarily not affect the prices of goods and services so much. Because importers are buying their goods at prevalent market price
6. The petrol used now was bought at the CBN rate so from July when new importers start importing the price of petrol will go up because they will be importing at the prevalent market price.
What does floating the naira mean? Floating the naira implies that Nigeria has allowed market forces to determine the exchange rate of its currency. Previously, the CBN dictated the rates. With the floating exchange rate, buyers and sellers in the official FX market can quote rates they find comfortable
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What does it mean to float the Naira?
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#CBN Floats Naira
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