The Central Bank of Nigeria (CBN) has on Saturday adjusted the official exchange rate to N379/$ to reflect market realities in challenging time.
Before the current adjustment, the official exchange rate had remained at N361 to dollar, based on data from the CBN’s website
The new official exchange rate now displayed on the CBN website is closer to the N381/$ being traded on the secondary market intervention sales (SMIS) window. The SMIS is the market where importers bid for forex using letters of credit and Form M.
The naira exchanged at N473 to dollar at the parallel market, which has continued to be a major source of dollar since March ending when the CBN sustained dollar sales to bureaux de change operators.
With drop oil revenues, the adjustment is expected to boost funds available to the federation accounts allocation committee for disbursement to the three tiers of government.
The CBN had also devalued the currency in March, when it adjusted the official peg against the dollar to N360 from N307. However, CBN Governor, Godwin Emefiele said at the time the move was “an adjustment of price and not a devaluation of the currency.”
Foreign investors, IMF and World Bank had long called for Nigeria to merge its multiple exchange rates, saying the absence of a single rate creates confusion and deters foreign investment.
The multilateral institutions insisted that with drop in foreign exchange reserves and decline in Nigeria’s dollar earnings over fall in crude oil prices, Nigeria had no option but to devalue its currency.
Analysts insist that with yesterday’s new official rate for the naira, the apex bank is finally bringing all the rates together.
