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01.06.2023 stories EXPLAINER: I&E Window Isn’t Naira Devaluation. What Does It Mean?

Published 1st Jun, 2023

By Daniel Ojukwu

Several newspapers have claimed that the Central Bank of Nigeria (CBN) on Thursday devalued the naira to exchange for ₦630 to a dollar.

The report came in the early hours of Thursday, and was shared on social media.

Daily Trust newspaper first published it as an exclusive report before other newspapers did, but how true was this report?

CLAIM: CBN devalued Naira to ₦630 to $1.

Daily Trust's Thursday report
Daily Trust’s Thursday report

Daily Trust’s Thursday report read, “The Central Bank of Nigeria (CBN) has devalued the Naira to N631 to the dollar from N461.6 it sold at the Importers and Exporters (I&E) window the previous day, Daily Trust gathered.

READ ALSO: Aisha Buhari Blames Hacker for Fake CBN Statement Posted on Her Instagram Handle

“The devaluation came 48 hours after President Bola Ahmed Tinubu announced the plans of the federal government to unify the country’s exchange rate to stimulate the economy.”

That report was also published here, here and here.

Following this, the CBN, via its official Twitter handle, @cenbank, published a screenshot of Daily Trust’s report, with the words ‘Fake News’ branded on it.

The bank described the report as “the imagination of the newspaper”, and said the Investors & Exporters (I&E) window traded at ₦465/$1 on June 1.

CBN's statement debunking naira devaluation
CBN’s statement

Checks by FIJ shows that the window is not new or directly linked to the naira’s official value against the dollar.

In April 2017, the CBN opened a similar window for investors and exporters.

Tagged: “Investors’ & Exporters’ FX Window”, CBN’s Director in charge of Financial Markets at the time, Alvan Ikoku, said the new window would boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

On the Polaris Bank website, the I&E window is described as “the market trading segment  for investors, exporters and End Users that allows for FX trades to be made at market determined exchange rate”.

This market determined exchange rate may differ from the CBN official exchange rate.

What it means is that in this window, two entities may wish to trade and exchange a dollar for naira above the CBN official exchange rate.

When both parties do so, it does not mean the CBN official exchange rate has changed. It actually has no bearing on the official rates.

On the CBN website, the bank’s last update of May 30, 2023, has the official exchange rate pegged at ₦461.6 to a dollar.

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Published 1st Jun, 2023

By Daniel Ojukwu

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