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Forex fluctuates as CBN devalues Naira to N379 /dollar

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Data obtained from the central bank of Nigeria CBN website has shown that the Bank has adjusted the official exchange rateas at last weekend to N379 per a dollar against N360/$1.

Experts say the adjustment came as a result of the efforts of the Bank to close gap of various forex markets. However, the adjustment has triggered fluctuations in the market, following that the exchange rate between the naira and the US dollar as of yesterday, August 10th 2020 stands at ₦485/US$1 in the parallel market. The exchange rate closed at ₦486/US$1 on Friday 7th August 2020.

Also the exchange rate between the naira and the British pound sterling stands at ₦584/₤1 on Monday 10th August as against ₦585/₤1 recorded on Friday 7th August 2020.

While the exchange rate between the naira and the European euro stands at ₦523/€1 on Monday 10th August 2020. The exchange rate also closed at ₦550/€1 on Friday 7th August 2020.

The adjustment of the rates also indicates that the apex Bank foerx measures are tiltingtowards a unified exchange rate.

The CBN Governor Godwin Emefiele recently hinted of unifying the exchange rate with other forex sources.

Analysis of the CBN measures also shows that the recent measure is the second devaluation of the official exchange rate after the rate was adjusted from N307 to N361 on the 20th of March 2020.

It would be recalled that Emefieleguaranteed investors in June that the CBN will unify the exchange rate around the NAFEX rate in line with the conditions of the World Bank.

However, this has taken longer period that is required and may have resulted in the postponement of a planned world bank meeting where an approval of the initial $3 billion loan from the world bank would have been obtained in September and October for the Federal and State Governments respectively.

One of the conditions for the disbursement of the loan was a unification of the exchange rate which most analysts believe the CBN has dithered on for months.

The latest adjustment however indicates this could be the CBN’s biggest move yet at exchange rate unification as the rate is closer to if not the same with the N380/$1 announced in July for the SMIS window.

At the black market where forex is traded unofficially, the Naira depreciated against the dollar to close at N475/$1 on Friday, according to information from Abokifx, a prominent FX tracking website.

This represents a N1 drop when compared to the N474 to a dollar that it exchanged on Thursday, August 6.

However, in a deeper drop, Nairametricsforex tracker obtained a price as high as N486/$1 from some traders suggesting market volatility still persists.

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N386/$1. This represents a 50 kobo drop when compared to the N385.50 rate close that was reported on the last trading day, Thursday, August 6.

The opening indicative rate was N385.55 to a dollar on Friday. This represents a N1.33 gain when compared to the N386.88 to a dollar that was recorded on Thursday.

The Naira fell to as high as N390 during intraday trading before strengthening to the closed rate of N386. It also sold for as low as N359/$1 during intraday trading.

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