The Central Bank of Nigeria (CBN) has instructed bidders at its Secondary Market Intervention Sales (SMIS) to increase their bidding price to N380/$1 floor.
The SMIS is the market where importers bid for forex using Letters of Credit and Form M.
But the official naira exchange rate remains at N360 to dollar although the current adjustment may be the beginning of further unification of the exchange rate as canvassed by the International Monetary Fund and World Bank in their advice to the Federal Government.
Market sources said the apex bank informed banks that they would only accept bids at SMIS from N380/$1 and above and no longer N360/$1 meaning those who bid lower will not get any forex allocation.
Transaction success in this market is based on bids with those who bid higher than the floor as they are often in an advantageous position to secure forex.
This is essentially a huge attempt at unifying the naira and another adjustment of the exchange rate by the CBN.
The CBN Governor,Mr. Godwim Emefiele, had informed investors that the bank would be unifying the exchange rate towards what is being traded at the NAFEX market where investors and exporters trade forex.
Currently, rates are set at a floor of N360/$1 and a ceiling of N385/$1. Thus bidders are expected to bid within that range.
The higher the bid, the better the chances of bidders at getting forex. It is unclear if there were any buyers that bid above N360 as we gather most of the importers were not informed of the changes in prices until yesterday.