Naira sees biggest plunge at official window as CBN adjusts rate
Naira tumbles to N435/$1 at official market as CBN adjusts forex rate
The naira hit an all-time low in the official market on Thursday and Friday, trading at N435 per $1 after the Central Bank of Nigeria (CBN) updated the country’s currency rate on its website at N413.49 per dollar.
The CBN’s move could signal the start of another wave of currency depreciation by the bank.
After adopting the Investors and Exporters (I&E) window rate, popularly known as the Nafex rate, the apex depreciated the naira from N379 to N411.00 per dollar in May.
The naira had made no official market movement versus the US dollar as of the conclusion of business on Friday, the last day of 2021. It closed at N435.00 to the dollar, the same rate at which it traded with the greenback on Thursday, according to data published on the FMDQ securities exchange windows where forex is officially transacted.
This happened because foreign exchange supply fell significantly from the prior session on Thursday.
Since February 23, this is the greatest drop in the official market for Nigeria’s naira. According to Bloomberg data, the naira has declined on an annual basis for the past nine years.
The apex depreciated the naira from N379 to N411 per dollar in May by implementing the (I&E) window.
Although CBN Governor Godwin Emefiele has disputed claims of naira depreciation, Nigeria employs a managed-float exchange regime.
According to theCable, Nwanisobi Osita, spokesperson of the CBN, revealed that the market is a major criteria for the exchange rate.
“If you see N413, then that’s what it is. The market determines the rate,” Osita said.
Since March 2020, the apex bank has depreciated the exchange rate several times in an attempt to close the gap between the official and parallel market rates.
The local currency was constant at N570 per dollar on the parallel market.