The Central Bank of Nigeria (CBN) has finally moved forward with the much anticipated plan of a flexible exchange rate system. The so called “automatic adjustment mechanism of the exchange rate,” allows a market driven exchange rate system. Making the announcement on Wednesday, CBN Governor, Godwin Emefiele said the apex bank will continue to monitor the system to ensure transparency of the foreign exchange market.
Emefiele said: “The Central Bank of Nigeria has always maintained that it would continue to monitor situations on the ground and ensure that the Bank’s policies reflect these facts and developments rather than the sentiments of any groups or sectors.
“It is in light of this principle that we now believe that the time is right to restore the automatic adjustment mechanism of the exchange rate with the re-introduction of a flexible inter-bank exchange rate market.
“The workings of this market will be consistent with the Bank’s objectives of enhancing efficiency and facilitating a liquid and transparent Foreign Exchange Market.”