CBN Devalues Naira again, now N381 to dollar official rate

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CBN Devalues Naira After Failed Market Interventions

…As CBN devalues naira again to meet Nigeria’s multiple exchange rates

By: Rachael Bassey

On Tuesday, the Central Bank of Nigeria adjusted the value of the naira to exchange to the dollar rate at N381, this is a measure taken to meet the Nation’s multiple exchange rates and guarantee stability.

Although the CBN has not formally made its position known, 5.54percent change from N360/$ to N381/$ is the data obtained on the website of FMDQ OTC Securities exchange on the CBN official rate.

FMDQ Securities, recorded by the securities and Exchange Commission was set in place to produce platform for the registration listing, quotation, trading and reporting of securities and financial products more efficiently.

The new rate is believed to be in line with the apex bank’s efforts to merge the exchange rate as the foreign exchange spot. On Tuesday, the dollar was quoted at N380.69k at the Secondary Market Intervention Sales (SMIS), where imported gain access to foreign currencies.

An analyst at Lagos-based Chapel Hill Deham, Omotola Abimbola said, Oil revenue contribution to the Nigerian economy should get a lesser boost from the devaluation of the official rate.

“Now, CBN has to unshackle the I&E window, and maybe we can put this FX liquidity problem behind us,” Mr Abimbola wrote.

In March, the CBN has regulated the official exchange rate to N360/$ from N307/$ and abolished the N325 and N330 concessionary rates.

Recently, Godwin Emefiele, the apex bank Governor explained that the bank is making efforts to a more unifying multiple exchange rates.

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“What we mean by exchange rate unification is moving towards the NAFEX”, he said.
“NAFEX is our dominant market for the purchase and sale of forex and it is a free market where everybody is free to sell their dollars and those who want to buy are free to buy dollars,” he said at the meeting.
“That means that whether you are a businessman, a bank, CBN, and you have dollars, you can bring it to the market to sell and if you want to buy dollars, you can come to the market.
“Like some of you must have seen, three years before 2019, we saw a relatively stable forex market because the NAFEX rate and even the rate at which the central bank transacts business outside the NAFEX were substantially close to each other. So, the CBN will continue to pursue unification around the NAFEX.”

Ayodeji Ebo, managing director of Afrinvest Securities Limited, on his own part described the act as being positive, stated further that what’s left as “final lap” is a betterment in liquidity at the I&E window to make up the CBN’s efforts towards a more static price.

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