The Central Bank of Nigeria (CBN) on Saturday adjusted the official exchange rate to N379 to the dollar.
The official exchange rate had remained at N361 to the dollar for about five months until yesterday’s adjustment, which is seen as a big win for stakeholders – International Monetary Fund (IMF) and World Bank- canvassing for unified exchange rate for Nigeria.
The adjustment of the official exchange rate was in line with CBN’s earlier commitment to the IMF where the regulator promised to unify the exchange rate as part of the conditions for accessing $3.4 billion IMF loan in May.
The loan, which came under the Rapid Financing Instrument (RFI), was meant to assist Nigeria’s fight against COVID-19 and resolve urgent balance of payment needs.
With subdued oil revenues, the adjustment would help boost funds available to the federation accounts allocation committee for disbursement to the three tiers of government.
However, the naira closed at N475 to dollar at the parallel market where a large part of the demand for dollars have shifted to.
Speaking on the development, the CBN Governor, Godwin Emefiele, described the move as “an adjustment of price and not a devaluation of the currency.”
Foreign investors, IMF and World Bank had long called for Nigeria to merge its multiple exchange rates, saying the absence of a single rate creates confusion and deters foreign investment.
The multilateral institutions insisted that with drop in foreign exchange reserves and decline in Nigeria’s dollar earnings over fall in crude oil prices, Nigeria had no option but to devalue its currency.
Analysts insist that with Saturday’s new official rate for the naira, Nigeria's apex bank is finally bringing all the rates together.
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