I&E Window: Taking stock one year after formation
- A year ago, precisely the 21st of April 2017, after increasing pressures, the Central Bank of Nigeria (CBN) rattled markets, announcing in a surprise move the establishment of the Investors’ & Exporters’ FX Window (IEW). Furthermore, to support appropriate price discovery, among others, the FMDQ developed a new fixing, the Nigerian Autonomous Foreign Exchange Fixing (NAFEX), which is the benchmark rate for FX spot transactions in the IEW.
- This move trailed a raft of policy measures as the CBN made a U-turn with regard to its currency policies, following the widening of FX market premium between interbank and parallel market to a post-floatation high of 70% (20th of February 2017) and a fiscal nod from the National Economic Council mandating the CBN to take actions to stem widening parallel market premiums.
- Anniversaries are inevitably a time of taking stock. Where have we been? Where are we going? What have we accomplished? And as the IEW marks one year, the question that can justifiably be asked is whether the current FX stability is sustainable.
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