The Central Bank of Nigeria, through its spokesperson, Isaac Okarafor, has explained why it was necessary for the apex bank to create several exchange rates in the forex market. According to Reuters, Okarafor, said that the multiple exchange rates are the only way forex liquidity could be maintained while simultaneously allowing investors to trade their own dollars at a more market-determined rate.
The CBN opened yet another window for investors and analysts this week, a move which effectively created another exchange rate, in addition to the existing five rates already in the market. The window which has begun trading also has the CBN as a participant. This s part of its continued interventions in the forex market, which is speedily approaching the $8 billion mark.
However, the CBN has come under severe criticisms from international economists and analysts, who deride the multiple exchange regime, currently in place in the country, with many remaining skeptic about the sustainability of the CBN’s interventions. Most prominently, the International Monetary Fund has urged CBN to scrap its multiple exchange rate regime to revive its economy, which is still quivering in recession.
Also, analysts continue to question the efficacy of the current methods the CBN is using, to draw inflows into Africa’s biggest economy as it masked pressure on the naira with the regulator trying to avoid a devaluation.