The Deputy Governor of the Central Bank of Nigeria (CBN), Dr. Kingsley Obiora, has revealed that the bank is planning to further relax controls in the coming weeks in order to determine a new value for the naira. In an interview in Rabat, Morocco, Obiora stated that the market is currently operating based on a willing buyer/willing seller basis, with the central bank refraining from intervening as a buyer or seller. The aim is to allow the market to determine the price of the currency. Obiora expressed confidence that the official and parallel-market exchange rates would converge soon.

He acknowledged that analyses conducted by the International Monetary Fund and international banks, suggesting that the naira is not as weak as indicated by the parallel market, were correct, with the official rate still below the parallel market rate. Obiora noted that the backlog of unmet demand for dollars was manageable and mentioned that the reforms being implemented by President Bola Tinubu could potentially double the economic growth rate next year from around three percent to five or six percent.

Meanwhile, the parallel market exchange rate for the naira was at N755/$1, stronger than the N770/$1 rate in the Investors and Exporters' (I & E) window. The naira experienced depreciation against the dollar on the I & E window, reaching N663/$1 on Monday, compared to the N770/$1 at which it closed. The highest spot rate recorded on the I & E FX window was N799/$1.

However, analysts predict that the ongoing volatility in the I & E FX window will persist in the short term as the currency aims to achieve stability and settle at its true value. Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co, emphasized the likelihood of market volatility due to the lack of clarity in the current policy. He raised questions about whether the official rate is floating or following a crawling peg, and expressed concerns about the lack of incentives for those holding foreign exchange to enter the market.