The Central Bank of Nigeria (CBN) sold dollars to banks at N380/$1, the highest official exchange rate between the dollar and naira in over two years suggesting a devaluation is in the offing.
Banks trading at the Investor and Exporter (I&E) window bought dollars at N360/$1 from the CBN on Friday March 20, 2020. The I&E window is the official market where forex is traded between banks, the CBN, foreign investors and businesses. The central bank typically buys or sells in the market as part of its intervention program.
The central bank in a press release last week said that the “market fundamentals do not support naira devaluation at this time” detailing reasons why it did not need to devalue. Having sold at N380 at the I&E window the CBN has officially accepted the exchange rate has now depreciated officially in line with a drop in oil price. The Brent crude fell below $30 this week as oil prices continued their recent slide in the wake of the price war between Saudi and Russia.
What next: The CBN still retain the N307/$1 as its official exchange while the exchange rate is still N366/$1 for personal travels. Nigeria maintains a multiple exchange rate regime with forex sold at several windows.
Data from the website of the FMDQOTC also reveal the exchange rate was reportedly devalued the Naira. The apex bank has not issued an official statement on the development.
Efforts to confirm the development from the apex bank was abortive, as the CBN’s Director, Corporate Communications, Dr Isaac Okorafor, failed to respond to Nairametrics enquiries.