CBN Quietly Devalues Naira

CBN has quietly devalued Naira.

 

News Online reports that the Nigerian currency has now been officially devalued from N379 to N410.25.

 

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The Central Bank gave the official seal as it ended a regime of three rates for the currency, a policy that had been hammered by the World Bank and IMF.

There was no official announcement about the new value of the Naira.

But on Monday night, the CBN quietly confirmed the new official rate, which it referred to as the NAFEX Exchange rate on its website.

 

The new rate replaced the N379/$, which disappeared from the website earlier in May.

 

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CBN governor Emefiele had said that the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria.

 

“In order to adjust for the decrease in supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and now hovers around N410/$,” he said.

The NAFEX rate gave the black market a small bump up of 0.2 percent on Tuesday, rising to N483/487, from N480/484.

 

Banks were however offering the dollar at rates much higher than the NAFEX rate.

 

Zenith Bank, according to ngnrates.com, sold the dollar at N455 on Tuesday.

 

Meanwhile, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday retained the Monetary Policy Ratio at 11.5 per cent for the fifth consecutive time.

The CBN Governor, Mr Godwin Emefiele, presenting a communique from the MPC meeting, said the committee, through unanimous vote by members, decided to hold all other parameters constant.

 

The Cash Reserve Ratio (CRR) was, therefore, retained at 27.5 per cent, Liquidity Ratio at 30 per cent and the Asymmetric Corridor at plus 100 and minus 700 basis points around the MPR.

 

Emefiele said that recent developments in both global and domestic economy presented two broad options to the MPC.

He said the MPC would continue to support the Federal Government in its effort to revamp the productive sector to accelerate economic diversification.