HomeLocal NewsAgain, CBN devalues naira, now N411 to dollar

Again, CBN devalues naira, now N411 to dollar

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The naira traded at a record low against the dollar at the official NAFEX window on Friday.

Reuters reports that this could be a move by the CBN to unify multiple exchange rates.

The naira closed at 411.25 — the last closing rate for the naira, despite hitting N419.75 to a dollar during the intra-trading day, People’s Gazette reports.

Having traded within a band of 380 and 381 to the dollar since July last year, the naira hit a record low of 419.75 against the dollar on Friday.

The different trading rates have attracted warnings from the World Bank, which has asked that the rates be unified in order to attract investment.

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The Governor of the apex bank, Godwin Emefiele, had in February confirmed that the naira has depreciated at the official market to N410 against the dollar as the government tries to boost earnings from crude sales, its main export.

On Friday, The CBN removed the exchange rate of N379/$1 from its website homepage. The exchange rate displayed on the website was usually the reference point for the official exchange rate of the country. The last data entry for the exchange rates shows May 10.

Since the Central Bank last adjusted the exchange rate in August 2020, it has retained the exchange rate of N379/$1 on its website homepage which in the past, represented the official exchange rate. The exchange rate displayed on the website has historically been referenced as the official exchange rate of the country.

However, all government transactions since 2021 have been converted using the prevailing exchange rate at the official NAFEX window confirming that the erstwhile official exchange rate of N379/$1 is dead.

More so, Nigeria operates multiple exchange rate windows ranging from the I&E (NAFEX) window where forex is traded between exporters, investors, and purchasers of forex, the SMEIS window where forex is sold to importers, and the BDC window which is where forex is sold to retailers. Several calls have been made both locally and from abroad to get the CBN to unify the multiple exchange rates.

Sources within the apex bank, however, informed Nairametrics that the official exchange rate recognized for transactions between parties has always been the NAFEX rate. They also claim this is the exchange rate used by the Federal and State governments when monthly allocations are shared, Nairametrics reports.

 

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