The Central Bank of Nigeria (CBN) is to issue a new guideline on foreign exchange that will allow demand and supply to determine the exchange rate.
The guidelines due any moment from now and a reintroduction of the flexibility regime is part of the outcome of the two-day Monetary Policy Committee (MPC) that has just ended in Abuja.
With the reintroduction of flexible foreign exchange market, more fired inflow is expected in due time through diaspora remittances and foreign investment.
The CBN Governor, Godwin Emefiele who disclosed this also announced that it retained its standard lending rate, the Monetary Policy Rate (MPR) at 12 percent but will flexibility in the management of its Foreign Exchange .
He further disclosed that the MPC took a decision to retain the Cash Reserve Requirement (CRR) at 22.5 per and the Liquidity Ratio at the current rate of 30 per cent.
Key highlights of meeting ending on 24 May 2016, the MPC are:
- Introduce flexible exchange rate policy
- Maintain Monetary Policy Rate at 12%
- Retain the Cash Reserve Requirement at 22.5%
- Retain Liquidity Ratio at 30% and maintain asymmetric corridor of +200/–500 basis points around the midpoint of the MPR
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