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Following the Central Bank of Nigeria’s unification of exchange rate, Nigerian billionaires including Aliko Dangote and Abdulsamad Rabiu listed among the 500 richest men in the world, have lost more than a combined $5.85 billion, according to the Bloomberg Billionaire Index (BBI).
This is even more so as the rate of the Naira plummeted to N702.19/dollar at the close of market operations on Thursday.
The index revealed that Dangote, President of Dangote Group, lost about $3.12 billion in the latest update, while Rabiu, CEO of BUA Group, was said to have lost $2.73 billion from his wealth in the first 24 hours after the float.
Nigeria has allowed for a free float of the national currency against the dollar and other global currencies.
Nigeria has abandoned its years-long currency peg and allowed the naira to trade freely, traders and local bankers said, prompting the biggest single-day fall in its history.
The naira has now lost about five percent of its value within 24 hours from the N664.04/dollar recorded at the close of business on Wednesday.
Speculations are rife that the Central Bank of Nigeria might begin to supply foreign exchange to the market in the coming days.
It was gathered that the CBN directed Deposit Money Banks to remove the rate cap on the naira at the official Investors’ and Exporters’ Windows of the foreign exchange market.
This came barely two weeks after President Bola Tinubu promised to unify the nation’s multiple exchange rates and less than a week before the suspension and detention of CBN Governor Godwin Emefiele, whose unorthodox monetary policies had become a stumbling block to investors and the economy.
The move has been hailed by some financial experts and economists who made it known that the move would unify the country’s multiple exchange rates and sanitize the FX market.
The development means buyers and sellers of foreign currency in the official FX markets are now allowed to quote rates they find comfortable in the FX market, as against the previous practice where rates were dictated by the Central Bank of Nigeria.
Following the development, the naira has been on a free fall, weakening to 702.19/dollar at the close of trading at the I&E Window on Thursday, according to data from the FMDQ Securities Exchange.
According to the statement, the CBN has collapsed all foreign exchange segments into the I&E window.
It read, “The Central Bank of Nigeria wishes to inform all authorised dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange Market: Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
“Re-introduction of the ‘Willing Buyer, Willing Seller’ model at the I&E Window. Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DlR/ClR/GEN/08/007. All eligible transactions are permitted to access foreign exchange at this window.
Meanwhile, at the parallel market on Thursday, the naira closed flat at 757/dollar, according to currency dealers in Kano, Abuja and Lagos.