Financial Market: Naira Depreciates Further As CBN Devalues Currency

-by our correspondent.

The Naira (N) has taken a further deep, following devaluation of the Nigerian currency by N6 to a dollar over the weekend.

The devaluation has brought the local currency closer to the exchange rate unification agenda of the Central Bank of Nigeria (CBN) as recommended by the International Monetary Fund (IMF) and World Bank.

Consequently, in a circular titled ‘weekly exchange rate for disbursement of proceeds of International Money Transfer Service Operators (IMTOs) for November 30, 2020’, the apex bank has advised all authorized dealers: Bureau De Change (BDC) Operators and Service Providers to add N6 across all rates.

The new rates, pegs IMTOs sale of dollar to banks at N388 to a dollar, higher than the previous rate of N382 to a dollar; banks sale of a dollar to CBN at N389, as against the previous rate of N383 to a dollar.

Similarly, the apex bank sale of a dollar to BDCs is pegged at N390 to dollar, as against previous rate of N384 to the dollar. The BDCs are directed to sale to end-users at not more than N392 a dollar, as against the previous rate of N386. The CBN however retained policy authorizing each BDC to buy $10,000 weekly.

The CBN circular also directed that the Great Britain Pounds (GBP) rate should be derived from the US dollar across rate on the date of sale.

The current devaluation of the local currency follows years of continued pressure from financial market analysts, the World Bank and International Monetary Fund who insisted that with drop in foreign exchange reserves and decline in Nigeria’s dollar earnings and the fall in crude oil prices, Nigeria is left with no other option but to devalue its currency.


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