The Central Bank of Nigeria (CBN) Friday sold dollars to banks at N380/$1, thereby confirming suspicions of an impending devaluation of the currency over the months.
Confirming this in an interview with our correspondent Friday night, President of the Association of Bureau De Change Operators of Nigeria (ABCON) Alhaji Aminu Lawan Gwadabe stated that the CBN sells dollars to them at N378/1USD, while they resell at N380/1USD to end users. With the black market traders on Allen Avenue Ikeja, 1 dollar goes for between N400 and N405.
Experts describe the latest development (N1380/1USD), as the highest official exchange rate between the dollar and naira in over two years suggesting devaluation is now real.
Banks trading at the Investor and Exporter (I&E) window bought dollars at N360/$1 from the CBN on Friday March 20, 2020. The I&E window is the official market where forex is traded between banks, the CBN, foreign investors and businesses. The central bank typically buys or sells in the market as part of its intervention program.
In an apparent double speak, the CBN in a press release last week had said that the “market fundamentals do not support naira devaluation at this time,” detailing reasons why it did not need to devalue. But having sold at N380 at the I&E window the CBN has officially accepted the exchange rate has now depreciated officially in line with a drop in oil price.
The Brent crude fell to $27 this week as oil prices continued their recent slide in the wake of the price war between Saudi Arabia and Russia.
The CBN still retains the N307/$1 as its official exchange, while the exchange rate is still N366/$1 for personal travels. Nigeria maintains a multiple exchange rate regime with forex sold at several windows.
Although the apex bank has not issued an official statement on the development, market analysts believe that the indication for devaluation of the Naira had always been there.