CBN devalues naira, exchange now N380/$1

THE Central Bank of Nigeria (CBN) yesterday, adjusted the exchange rate to N380/$1 from N379 per dollar that it has had on its official website since August.

Also, the apex bank adjusted its official selling exchange rate to N381 per dollar from the former N380/$1. Although the bank is yet to issue any statement on the slight adjustments, analysts believe it is in line with its exchange rate unification moves.

The CBN had on August 7 this year altered the official exchange rate on its website to N379/$1 from the N361 per dollar that the site had reflected since March 20. It also adjusted the official selling exchange to N380/$1 from N361 per dollar.

Prior to the adjustments in August, the bank’s regulator had on July 3, adjusted the naira’s rate from N360/$1 to N380/$1 at the Secondary Market Intervention Sales (SMIS).

Similarly, on July 7, it adjusted the exchange rate at the Investors and Exporters’ (I&E) window, also known as NAFEX, according to data on FMDQ website, by 5.54 percent to N381 per dollar from N361/$, sparking speculations that it was set to officially unify the exchange rates.

Announcing the resumption of dollar sales to Bureaux De Change (BDCs) in late August, which had been suspended in March due to Covid-19 restrictions, the CBN unveiled what it described as, “applicable exchange rate for the disbursement of proceeds of International Money Transfer Service Operations (IMTOs) for the period Monday, August 31 to Friday, September 4, 2020.”

Specifically, the bank directed that the rates for the period will be as follows: “IMTSOs to banks – N382/$1; Banks to CBN — N383/$1; CBN to BDCs — N384/$1 and BDCs to end-users – Not more than N386/$1.”

In the wake of acute forex scarcity, occasioned by the slump in the price of oil (the commodity that accounts for over 90 per cent of Nigeria’s export earnings), the external reserves started heading south since the first quarter of 2020, thus making it difficult for the apex bank to be able to adequately meet forex demand.

With the naira coming under pressure in the forex markets, the CBN also came under pressure from the World Bank and International Monetary Fund (IMF) to unify the country’s multiple exchange rates.