CBN Denies Devaluing Naira to N630/$ In Compliance With Tinubu’s Request for Exchange Rate Unification
- The Central Bank of Nigeria (CBN) has denied devaluing the naira to N630 to the dollar from the previous rate of N461.6.
- There were reports that the CBN had devalued the naira in response to President Bola Ahmed Tinubu's call for a unified exchange rate
- The move, if it were accurate, would have helped to address the widening gap between the official and parallel markets
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The Central Bank of Nigeria (CBN) has repudiated the report that it devalued the naira to N630, as reported by Dailytrust.
The Punch also reported the devaluation news, noting that the new rate was a significant drop from the previous rate of N461.6.
Source: Getty Images
The devaluation report comes just 48 hours after President Bola Ahmed Tinubu announced the Federal Government's plans to unify the country's exchange rate to stimulate the economy.
Legit.ng had reported that President Tinubu, in his inaugural speech as the 16th president of Nigeria, emphasised the need for a thorough house cleaning in monetary policy, particularly the unification of the exchange rate.
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He believes such measures will drive investments in the real economy, focusing on important sectors like manufacturing and infrastructure.
CBN reacts
Reacting to the reports, CBN took to its Twitter page to deny the report, sharing the screenshot of the Dailytrust newspaper report.
The tweet reads:
"CBN did not devalue the Naira!"
CBN thereafter released a statement signed by Isa AbdulMumin, the acting director of Corporate Communications.
The statement reads:
"The attention of the Central Bank of Nigeria (CBN) has been drawn to a news report by Daily Trust Newspaper of June 1, 2023, titled "CBN Devalues Naira To 630/$1".
"We wish to state categorically that this news report, which in the imagination of the newspaper is exclusive, is replete with outright FALSEHOODS and destabilising innuendos, reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.
"For the avoidance of doubt, the exchange rate at the Investors' & Exporters' (I&E) window traded this morning (June 1, 2023) at N465/US$1 and has been stable around this rate for a while.
"The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market.
"Media practitioners are advised to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public."
Naira exchange rate
Meanwhile, Legit.ng checks show that the Naira closed on Wednesday, March 31, 2023, at the Importers and Exporters (I&E) window, where the naira is officially traded at N464.67.
This is a 17 Kobo or 0.04% loss against the dollar compared to N464.50/$1 what it exchanged at on Tuesday.
The naira's poor performances, as seen on the FMDQ securities exchange, occurred amid a 13.1% or $19.02 million rise in the value of forex trades in the spot market.
The turnover for the trading session stood at $163.74 million against the $144.72 million recorded in the preceding session.
Further, a check on the CBN website interbank exchange rate shows naira closed at N461.6.
Naira equally depreciated against the Pound Sterling in the interbank segment of the forex market on Wednesday by N2.64 to close at N574.37/£1 versus Tuesday’s N571.73/£1.
While it lost 52 Kobo against the Euro to settle at N495.89/€1 versus N496.41/€1.
Expert speaks
Reacting to the development, Andrew S. Nevin Advisory Partner and Chief Economist at PwC Nigeria said:
"The parallel market represents the USD market. The involvement of the CBN in supplying USD is not aligned with successful economic development, as we have observed. If you require USD, contacting the bank should be the appropriate course of action"
He added that there should not be an Investors and Exporters market, stressing that it is not the role of the Apex Bank to operate a foreign exchange market.
"The market should operate independently. The petrol dollar from NNPC does not belong to the CBN. When this is achieve all the confusions will go away."
Report shows naira lost half its value against US dollar under President Buhari
Meanwhile, in another report, the Nigerian naira's exchange rate against the United States dollar declined significantly during President Muhammadu Buhari's eight-year tenure.
Calculation shows that the naira weakened by 57.26% and 37.58% in the official and black markets.
When President Buhari assumed office in 2015, data from the Central Bank of Nigeria's official window indicated that the naira exchanged at N197/$ against the US dollar.
Source: Legit.ng
