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Exchange rate unification: CBN weakens official naira to N380/$1

The Central Bank of Nigeria (CBN) may have finally unified the country’s multiple exchange rates as it yesterday altered the official exchange rate at which it sells the naira to the dollar on its website to N380/$1 from the N361 per dollar that the website had reflected since March 20, this year. Although, the apex bank is yet to issue a statement on the development, analysts had been expecting it to make the move following its exchange rate unification actions last month. Specifically, the CBN had on July 3, adjusted the naira’s rate from N360/$1 to N380/$1 at the Secondary Market Intervention Sales (SMIS). Similarly, on July 7, the regulator adjusted the exchange rate at the Investors and Exporters’ (I&E) window, also known as NAFEX, according to data on FMDQ website, by 5.54 percent to N381 per dollar from N361/$, sparking speculations that it was set to officially unify the exchange rates.

However, it left the exchange rate unchanged at N361/$1 on its website. 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 naira has come under pressure on the parallel market and the I&E window where it trades for about N475 per dollar and N386 per dollar respectively. The CBN had in April this year given assurances to both the World Bank and International Monetary Fund (IMF) that it is committed to unifying the nation’s multiple exchange rates as part of measures to improve the transparency of its currencymanagement system.

In fact, in a letter that the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed wrote to the International Monetary Fund (IMF) in April when the country was seeking a $3.4billion facility from the Fund to tackle the impact of Covid-19 pandemic. She stated that the government over the next 12 months would seek to unify the exchange rates to generate more naira from its foreign inflows and manage the rate in a sustainable manner


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