Nigeria’s currency hits a record high N791/$1, a week after the arrest of its Central Bank governor

After the Central Bank of Nigeria implemented a new floating exchange rate policy, the Nigerian naira experienced significant volatility, hitting a record high of N791 to the dollar before settling at N663 at the end of the week.
In a circular released by the Central Bank of Nigeria, it was announced that all exchange rates in the country will now follow a "willing buyer, willing seller" arrangement at the Investors and Exporters (I&E) window, effectively abandoning the previous official rate and allowing the naira to freely float against major world currencies.
Nigeria's President, Bola Ahmed Tinubu, suspended and arrested Godwin Emefiele, the governor of the Central Bank of Nigeria, citing ongoing investigations and planned reforms in the financial sector.

After the most fascinating week for the Nigerian naira in years, the currency finished at N663 to the dollar in the Investors and Exporters (I&E) market. The exchange rate for the local currency was N702 to the dollar on Thursday, but it dropped on Friday to N663 at the conclusion of business, representing a rise of 5.58% from the close of N702.19/$1 that was recorded in the last trading session.

The naira is officially floating after the Central Bank of Nigeria (CBN) released a circular on Wednesday stating that all exchange rates in the nation will henceforth follow the "willing buyer, willing seller" arrangement at the I&E window.

Since then, the naira has reached a record high of N791 to the dollar, but it has since recovered to end the week at N663.04. To adopt the weighted average of transactions at the I&E window, the CBN also abandoned the previous official rate of N463 per dollar.

The weighted average of transactions made in the I&E window on June 15, 2023, is currently given by the apex bank as N589/$ on its website. This is a rebound from the bank's stated price of N632.77 from only one day earlier.

The Central Bank of Nigeria instructed deposit money banks to remove the rate cap on the naira at the Investors and Exporters window in order to allow the naira to freely float against the dollar and other major world currencies, as promised by President Bola Tinubu to unify the multiple exchange rates.

This appreciation was also touted as the reason why two of Nigeria’s billionaires, Aliko Dangote and Abdulsamad Rabiu, both of whom are on Bloomberg’s 500 billionaire index, lost a combined $5.85 billion dollars during the week.

This spike also comes off the heel of Nigeria’s new president, suspending and arresting the governor of the Central Bank of Nigeria, Godwin Emefiele. The President, Bola Ahmed Tinubu, suspended Emefiele from his position with immediate effect on the same day that he was arrested.

Emefiele was suspended “sequel to the ongoing investigation of his office and the planned reforms in the financial sector of the economy” according to a release by Willie Bassey, the Director, Information, for the Secretary to the Government of the Federation, George Akume.