( 3 minutes read)
· Naira fell to a six-month low at the parallel (black) market yesterday (Tuesday) after the Central Bank of Nigeria (CBN) adopted the relatively flexible Nafex exchange rate, which is linked to exports and investments
· This has resulted in an effective devaluation of Naira
· The currency closed at N411.56 to the dollar at the Investors and Exporters market- a 0.08 per cent erosion in value as compared to the previous day
Naira fell to a six-month low at the parallel (black) market yesterday (Tuesday) after the Central Bank of Nigeria (CBN) adopted the relatively flexible Nafex exchange rate, which is linked to exports and investments. This has resulted in an effective devaluation of Naira.
The currency closed at N487 at the black market against dollar, shaving off 0.21 per cent from N486 traded on the previous day. The last time Naira touched N487 at the black market was on November 25, 2020, which had sent jitters across the financial market.
The currency closed at N411.56 to the dollar at the Investors and Exporters market- a 0.08 per cent erosion in value as compared to the previous day. Naira touched an intraday high of N363.00 and a low of N420.25. In March, the central bank scotched the rumors of devaluation. Clarifying the point, Minister of Finance, Zainab Ahmed, said that the government had adopted the Nafex rate used by investors and exporters.
Analysts interpret the move by the finance ministry as a step towards unifying the exchange rate for naira, a condition laid by the World Bank for Nigeria to access a US$1.5 billion credit. There is always a spread between the official rate and black market rate in the value of Naira benchmarked against the dollar.
