The market capitalization of equities on the Nigerian Stock Exchange appreciated by N992 billion to close at N32.662 trillion, a 3.13% gain compared to the N31.670 trillion recorded in the previous trading session.
The All-Share Index (ASI) also traded 3.99% higher to close at 59,985.10 index points as against 58,163.55 index points recorded in the previous day’s trading session.
The Central Bank of Nigeria (CBN) on Wednesday opened up the naira rate at N700 to $1 to demand and supply forces.
By this policy decision, banks are to sell foreign exchange at their own price.
The development is coming after the sack of former CBN Governor Godwin Emefiele. During the last dispensation, the CBN dictated rates at which the dollar was sold at three different FX windows held by the country.
President Bola Tinubu had promised a holistic FX reform that includes harmonizing exchange rates in other to woo investors into the country.
Tinubu appointed the Deputy Governor, Operations Directorate, Folashodun Adebisi Shonubi to oversee the apex bank.
“We believe the changes signal a new era of focused, predictable monetary policy and a shift towards non-interventionism in the foreign-exchange regime,” Barclays economist, Michael Kafe, said in a note to customers.
At the Investors’ & Exporters’ window, the dollar is quoting between N750 to N755/$.
At the sidelines of the 2022 Spring Meetings of the IMF and World Bank in Washington DC, Emefiele had insisted Nigeria cannot withstand the impact of floating the naira.
He said, “They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself. When you allow that to happen, you will have an uncontrollable spiral on the naira. But what managed float means is that we have some measures in place to help control the spiral.”
The naira was floated after years of sticking with a hard peg that was believed to have scared away investors and drained the country’s external reserve.
This floating means buyers and sellers of foreign currency in the official FX market are now allowed to quote rates they find comfortable, as against previous practice where rates were dictated by the CBN.
