Central Bank Of Nigeria Devalues Naira By 5.3 Per Cent At Currency Auction, Confirms SaharaReporters’ Story

Central Bank Of Nigeria Devalues Naira By 5.3 Per Cent At Currency Auction, Confirms SaharaReporters’ Story

The Central Bank of Nigeria devalued the naira at one of its currency auctions, according to people familiar with the matter, Bloomberg said in its latest report.

The weakening comes after Governor Godwin Emefiele announced last month that the bank plans to unify its multiple exchange rates to improve the transparency of its currency-management system.

At an auction for importers on Friday, the CBN asked that bids for foreign exchange be made at N380 per United States dollar compared with N360 previously, the people said.

Isaac Okorafor, spokesperson for the CBN, didn’t answer calls to his mobile phone or reply to messages seeking comment.

The bank previously devalued the currency in March when it adjusted the official peg against the dollar to N360 from N307.

There’s another rate for investors and exporters known as the nafex window, which acts as a spot-rate for the naira.

The nafex -- which has been relatively stable around N388 per dollar since mid-May following a recovery in oil prices -- was introduced in 2017 as a way of wooing back foreign investors spooked by an economic crisis, without formally devaluing the currency.

The naira also trades widely in the black market, which Emefiele has said is illegal and is sold by the regulator to companies and individuals at varying rates.

Investors and the International Monetary Fund have long called for Nigeria to merge its multiple exchange rates, saying the absence of a single rate creates confusion and deters foreign investment.

On Thursday, SaharaReporters had exposed how the CBN deliberately prevents naira from appreciating against the United States dollar.


 

   

     
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EXPOSED: How Central Bank Of Nigeria Deliberately Prevents Naira From Appreciating Against United States Dollar

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According to documents seen by SaharaReporters, the apex bank, which has refused to disclose the exact foreign remittances it has received from 2016 to 2018, deliberately stocks the US dollars it receives on behalf of Nigerians to trade them off through crooked means.

The CBN, it was gathered, was warehousing the dollar component of remittances in foreign banks, thereby making it impossible for the naira to appreciate against the dollar in the foreign exchange market.

“The CBN wants to continue to sabotage the national economy through dubious regulations and that was why it banned banks and other foreign exchange dealers from paying foreign currencies to recipients of foreign remittances.

“Thus, by warehousing the dollar component of remittances in foreign banks, the CBN has made it impossible for the naira to appreciate against the dollar in the foreign exchange market,” a financial expert with deep knowledge of the fraud going on in the apex revealed.

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Source: Central Bank Of Nigeria Devalues Naira By 5.3 Per Cent At Currency Auction, Confirms SaharaReporters’ Story