Naira at N380/$: Adjustment of price, not devaluation of Naira-Emefiele

TRACKING____The Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele has said the apex bank adjusted the price and not devalue the local currency as speculated by market stakeholders.

The CBN had directed that Bureaux de Change (BDC) operators in the country must not sell dollars higher than N380 to end-users.

This is compared to the previous N360/$ exchange rate that was adopted in 2016.

A memo signed by director of the apex bank’s trade and exchange department, O.S. Nnaji, addressed to banks and BDC operators, stated, “Please be advised that the applicable the exchange rate for the disbursements of proceeds of International money transfer service operators (IMTOs) for the period Monday, March 23 to Friday, March 27, 2020 is as follows: IMTSOs to banks: N376/$1; Banks to CBN: N377/$1; CBN to BDCs: N378/$1; BDCs to end-users: Not more than N380 and Volume of sale to each market is $20,000 per BDC.

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“Kindly note that the GBP rate should be derived from the USD cross rate on the date of the sale.’

It was also gathered that the CBN rate of N307/$ is and concessionary rates such as N325 and N330 were abolished.

In addition, all international oil companies would be required to sell their FX incomes to CBN at N360/$ as against the N325/$, they used to sell to the Nigerian National Petroleum Corporation (NNPC).

The CBN also unified the BDC segment rate with that of the investors and exporters window where the naira traded at N380/$ on Friday.

Meanwhile, as with the prior week, the nation’s foreign reserves dipped by $193.83 million to $35.98 billion (20 Mar 2020), as the CBN sustained its support for the currency across the different strata of foreign exchange windows.

Nonetheless, the naira remained under pressure, weakening by 0.95 per cent week-on-week to N372.00/$ at the Investors & Exporters (I&E) window, but strengthened by 1.3 per cent to N375.00/$ in the parallel market.

“Looking ahead, we expect FX market volatility to persist in the short to medium term as lower oil earnings, together with the deceleration in FX reserves continue to induce speculative attacks on the naira. In the longer term, an extended lower oil price environment will eventually force the CBN to reprice the naira,” analysts at Cordros capital explained.