CBN erases exchange rate on Its website as Naira falls

Premium Times is reporting that the Naira fell against the U.S. Dollar on Friday as the Central Bank of Nigeria (CBN) erased from its website the exchange rate that for about a year was seen as the government’s official rate.

The move by the CBN raised concerns about the devaluation of the currency that has long struggled amidst declining government revenue and foreign exchange.

The CBN denied in March it had devalued the naira after the Minister of Finance, Zainab Ahmed, said the government had adopted the Nafex rate used by investors and exporters.

The Nafex rate has oscillated between 408 and 412 for months, a significant fall from the 379 the CBN listed as the exchange rate on its website.

At the time, CBN governor Godwin Emefiele implied that the apex bank still maintained the “official rate” of N379, while the Nafex rate of N410 was adopted for certain government businesses.

He said the CBN was operating a “managed float” policy, which allows it to watch market dynamics and intervene in the market whenever necessary.

It became clear Friday that the 379 rate had been removed from the CBN website.

The CBN spokesperson, Osita Nwanisobi, did not return calls or respond to a text message seeking clarification Saturday.

Meanwhile, data posted on the FMDQ Security Exchange window where forex is officially traded, showed that the local currency closed at N411.67 at the trading session of the NAFEX window on Friday.

The currency’s performance on Friday represented N0.42 or 0.10 per cent devaluation from N411.25, the rate it traded in the previous session on Tuesday.

This became pronounced as foreign exchange supply increased significantly. The forex turnover boosted by 106.88 per cent, with $203.42 million recorded as against the $98.33 million posted in the previous session on Tuesday.

The currency hit an intraday high of N394.00 and a low of N426.67 before closing at N411.67 on Friday.

The last time the domestic currency hovered around N411.00 and above was on May 11.

Based on this, the spread between the parallel market and the official market exchange rates stood at N72.33 which translates to a gap of 14.94 per cent.

At the parallel market, Naira also declined to N484.00.

This represents N1.00 or 0.21 per cent depreciation from N483.00, the rate it exchanged hands with the greenback currency in the last three consecutive sessions.

Editor’s Note

A check on the CBN website revealed that the rate has been removed from the apex bank’s site while the CBN Official rate was last updated on May 10, 2021 on the FMDQ website. See images below