The recent depreciation of the naira to over N700/$ before settling at about N660/$ on the parallel foreign exchange rate market has remained a source of concern to a lot of Nigerians.
Analysts have averred that the Central Bank of Nigeria needs to address the challenge of multiple exchange rate windows in order to improve the inflow of foreign investments and diaspora remittances.
While calling for the harmonization of the foreign exchange rate in the country, many have said that multiple foreign exchange markets with significant price differentials create room for speculation, round-tripping, cronyism, and outright graft – with an attendant adverse effect on the economy.
While IMF broadly divides exchange rate regimes into three, Nigeria seems to fall within the soft exchange rate regime which is a hybrid of both hard and flexible exchange rates. Apart from this, the CBN also created different windows for various segments of the economy. This is what is now being referred to as multiple exchange rate.