Nigeria Allows Public Posting of Forex Rates in Bid for Exchange Rate Harmony

Nigeria has approved the public disclosure of forex rates by the Association of Bureaux de Change Operators of Nigeria.

The initiative aims to minimize the divergence between the official and unofficial naira rates.

President, Association of Bureau De Change of Nigeria Aminu Gwadabe said the move was to enhance market competitiveness and price discovery while challenging the influence of the parallel market.

This shift reverses the previous central bank’s strategy of limiting the visibility of the unofficial market to fortify the official naira rate.

However, this approach merely redirected activity to the streets and shadows.

The new development ensures that naira rates will be broadly visible online and represent the nation’s transition from a managed exchange rate to a free market.

The currency reform journey, initiated by President Bola Tinubu in May, has encountered challenges, witnessing a 50% depreciation of the naira against the dollar and a widening spread between the official and parallel markets.

The Economic and Financial Crimes Commission has targeted street currency traders, accusing them of money laundering and manipulation.

Despite these hurdles, the move toward rate transparency signifies a commitment to addressing Nigeria’s forex challenges and fostering a more unified and stable exchange rate environment.