According to reports, the Central Bank of Nigeria (CBN) has devalued Naira, setting the exchange rate at N640 to a dollar, as compared to the previous day’s rate of 1461.6 at the Importers and Exporters (I&E) window.
The devaluation occurred shortly after President Bola Tinubu announced his plans to unify the country’s exchange rate in order to stimulate economic growth.
The significant disparity between the I&E window and the parallel market, commonly known as the “black market,” has led to round-tripping activities with Bureau de Change operators.
During a meeting held on Tuesday, May 30, CBN Governor Godwin Emefiele discussed the exchange rate issue with President Tinubu. Daily Trust reported that following the meeting, the apex bank sold the spot rate to banks on behalf of their customers at 11651 to a dollar during the resumption of the weekly bidding for foreign exchange. Most bidders received the total amount they requested.
Customers have revealed that their requests were fulfilled at N640 per dollar, as opposed to the previous rate of 1461.6. This adjustment has also resulted in a downward trend in prices at the parallel market. In Abuja and Kano, prices dropped from $11750 earlier in the day to 1175 by evening.
Between 2020 and 2022, the CBN reportedly spent around $42 billion in interventions in the foreign exchange market to stabilize the Naira. These funds were sold to end users, including students and tourists, at official rates significantly different from the effective exchange rate of the Naira.
According to the Financial Stability Report published by the CBN, the apex bank sold $9.2 billion in the market during the first half of last year.
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