DT Brief: Unification of Nigeria Exchange Rate Regime: Steps and Implications

Event Round-up: Unification of Nigeria Exchange Rate Regime: Steps and Implications | Agora Thursday New Dispensation 3/6

Speaker: Emeka Chinonso Okafor | Date: 22nd June 2023

Key Message:
Nigeria’s exchange rate unification refers to the merging of exchange rates into a single unified rate. Initially, the government created four windows (oil & gas, BTA, SME, and Naira sector) to meet specific needs. These windows have been unified into the Investors and Exporters (I&E FX window). The I&E window encourages portfolio investors and exporters to bring foreign exchange (FX) into Nigeria, providing liquidity and attracting foreign investment. However, the country’s FX still plays a crucial role in determining exchange rates. Nigeria’s FX reserves and inflows mainly come from Crude oil exports, Diaspora remittances, Export products, and Foreign Direct Investment. The unification of Nigeria’s exchange rate regime can have several implications for the country’s economy and can be viewed from both the government and private sector perspectives.

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