CBN Devalues Naira, See New Official Exchange Rate

CBN has devalued Naira, pegging a new official exchange rate at N360.

NewsOne Nigeria reports that the Central Bank of Nigeria has collapsed the multiple exchange rate policy that determined the value of the naira and adopted a single exchange rate.

This burgeoning online news platform understands devalued its official exchange rate from N307/$1 to N360/$1. The apex bank has now reflected this change on its website making signalling a confirmation although the bank is yet to issue a press release to this effect.

The West African country will now have a uniform rate for the official rate, bureau de change operators, importers and exporters amongst others. This was contained in a circular signed by the Direct, trade, and exchange department of the CBN, Ozoemena Nnaji, on the disbursement of the proceeds of the International Money Transfer Operator (IMTO).

According to the CBN, IMTSOs to banks will be at N376 per dollar, banks to CBN N377 per dollar, CBN to Bureau de change operators N378 per dollar, BDCs to end-users should not be more than N380 per dollar and the volume of sales for each market is $20 thousand per BDC.

CBN circular mandating the new official exchange rate.

Although this move has been seen as technically devaluing the naira, last week, the CBN said in a release that “market fundamentals do not support Naira devaluation at this time.”

The naira has been under pressure after oil prices fell $30 per barrel, way below the government’s $57 target on which the 2020 budget was planned.

“Today we allowed the rate at the importer and exporters (I&E) window to adjust in response to market developments,” Bloomberg quoted a senior central bank official as saying, confirming the bank changed the rate at the window for foreign investors to 380 Naira per dollar from 366 Naira per dollar.”