IMF Endorses Nigeria’s FX Reforms, Backs Unified Exchange Rate System

• The IMF supports Nigeria’s central bank’s policy to unify exchange rates, allowing market forces to determine the rate.

• The new policy ensures that certain requests will still be processed through the Investors and Exporters (I&E) window.

• All forms of exchange rate segmentation are abolished, and the “Willing Buyer, Willing Seller” model will be reintroduced at the I&E Window.

EKO HOT BLOG reports that the International Monetary Fund (IMF) announced its support on Friday for the Central Bank of Nigeria’s (CBN) new policy to unify all exchange rates.

This policy, which merges all rates into the Investors and Exporters (I&E) window, allows the exchange rate to be determined by market forces.

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“The Fund greatly welcomes the authorities’ decision to introduce a unified market-reflective exchange rate regime in line with our long-standing recommendations. We stand ready to support the new administration in its implementation of FX reforms,” said Ari Aisen, IMF Resident Representative, Nigeria.

The new policy ensures that all requests related to medicals, school fees, Business Travel Allowance/Personal Travel Allowance, and SMEs will still be processed through the I&E window.

Angela Sere-Ejembi, CBN Director of Financial Markets, stated in a circular to authorized dealers that all forms of exchange rate segmentation are now abolished.

Sere-Ejembi also mentioned that the operational changes to the foreign exchange market will reintroduce the “Willing Buyer, Willing Seller” model at the I&E Window.

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“Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/08/007. All eligible transactions are permitted to access foreign exchange at this window,” she said.

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