For the first time in 20 years, the rate of exchange of local currency naira to the U.S. dollar has merged at both the official and parallel (black) markets, Governor of Central Bank of Nigeria (CBN) Charles Soludo said on Wednesday.
"This is a significant development in Nigeria's foreign exchange market," he said.
The CBN has recently liberalized the foreign exchange market in order to merge the rates of conversion of the naira at both official and parallel markets.
Now the local currency exchanged at 128.6 naira to 1 U.S. dollar and 129 naira to 1 dollar at the official and black markets respectively.
This is the first time both rates will merge since September 26, 1996 when General Ibrahim Babangida's administration introduced the Second-Tier Foreign Exchange Market (SFEM) when naira took a deep fall from 0.56 naira to 3.32 naira to 1 dollar.
The CBN governor also disclosed that by June 30, the actual figure of the nation's foreign reserves stands at 36.62 billion dollars, hitting an all-time high.
He said the CBN currently has reserves able to meet over 30 months of imports.
According to the International Monetary Fund (IMF) benchmark for currency conversions, any difference between official and parallel rate of exchange lower than 5 percent is considered as no difference.
Soludo said the apex bank was elated at the development, adding that the most fundamental foreign exchange rule changed since 1996.
"We are happy to have rebound the trend where the official market used to chase the black market but now it is the black market chasing the official market," he said.
The apex bank liberalized the foreign exchange market three months ago by allowing Bureau De Change (BDCs) to purchase forex at the official exchange rate in order to increase the supply side.
It also loosened the restrictions imposed on users of the official market in a bid to reduce the demand pressure in the parallel market while banks were also allowed to open BDCs to further serve customers.
Soludo said the new measures were geared towards drastic reduction in the BDC/parallel market rates as well as ensuring greater efficiency of the forex market.