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CBN clears exchange rate on website as Naira falls

By on May 15, 2021 0

Saturday May 15, 2021 / 03:20 PM / by Premium Times’ Abdulkareem Mojeed / Header image credit: NG Journal

The CBN decision raised concerns about the devaluation of the currency which has long struggled against a backdrop of declining government revenues and currencies.

The Premium Times reports that the naira fell against the U.S. dollar on Friday as the Central Bank of Nigeria wiped the exchange rate from its website, which for about a year was considered the official government rate.

The CBN’s decision raised concerns about the currency devaluation which has long struggled against a backdrop of declining government revenues and currencies.

The CBN denied in March devaluing the naira after Finance Minister Zainab Ahmed said the government adopted the Nafex rate used by investors and exporters.

The Nafex rate has hovered between 408 and 412 for months, a significant drop from the 379 the CBN listed as the exchange rate on its website.

At the time, CBN Governor Godwin Emefiele hinted that the umbrella bank still maintained the “official rate” of N379, while the Nafex rate of N410 was adopted for some government companies.

He said the CBN operates a “managed float” policy, which allows it to monitor market dynamics and intervene in the market whenever necessary.

It became clear on Friday that the 379 rate had been removed from the CBN website.

CBN spokesperson Osita Nwanisobi did not return calls or respond to a text requesting clarification on Saturday.

Meanwhile, data released on the FMDQ Security Exchange window where forex is officially traded, showed that the local currency closed at N411.67 during the NAFEX window trading session on Friday.

The currency’s performance on Friday was N0.42 or 0.10 percent devaluation against N411.25, the rate it traded in Tuesday’s previous session.

This became more pronounced as the supply of foreign currency increased dramatically. Forex revenue rose 106.88%, with $ 203.42 million recorded against $ 98.33 million posted in the previous session on Tuesday.

The currency hit an intraday high of N394.00 and a low of N426.67 before closing at N411.67 on Friday.

The last time the national currency hovered around N411.00 and above was on May 11.

On this basis, the spread between the parallel market and the official market exchange rates was N72.33, which translates to a spread of 14.94 percent.

In the parallel market, Naira also fell to N484.00.

This represents N1.00 or 0.21 percent depreciation from N483.00, the rate of hand trading with the greenback over the past three consecutive sessions.

Editor’s Note

A check on the CBN website revealed that the rate was removed from the umbrella bank’s website during the last official CBN rate update on May 10, 2021 on the FMDQ website. See images below


Credit:

The post office CBN Clears Exchange Rate As Naira Falls first appeared in Premiumtimesng.com on May 15, 2021.

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