Mr. Godwin Emefiele, Governor of CBN

CBN devalues Naira by 5.3 percent at currency auction ─Report

* Currency devaluation comes amid plans to unify nation’s multiple exchange rates

* IMF, investors have called for a single rate to enhance transparency

Isola Moses | ConsumerConnect

The Central Bank of Nigeria (CBN) has devalued the country’s national currency Naira at one of its recent currency auctions.

Sources to the matter disclosed that the weakening of the Naira comes after Mr. Godwin Emefiele, Governor of CBN, had announced June 2020, that the Bankers’ Bank plans to unify its multiple exchange rates in order to improve transparency of its currency-management system in the economy.

Bloomberg quoting familiar sources reports that the apex bank at an auction for importers Friday, July 3, requested that bids for foreign exchange be made at N380 (Naira) per US Dollar, compared with the previous N360.

Hitherto, report stated that the Bank had devalued the currency in March, when it adjusted the official peg against the dollar to N360 from previous N307.

There’s another rate for investors and exporters known as the ‘Nafex window’, which acts as a spot-rate for the Naira, it added.

The report indicated that the Nafex, which has been relatively stable around N388 per Dollar since mid-May following a recovery in oil prices, was introduced in 2017 as a way of wooing back foreign investors spooked by an economic crisis, without formally devaluing the currency.

The International Monetary Fund (IMF) and foreign investors have long urged Nigeria to merge its multiple exchange rates, stating that the absence of a single rate creates confusion and deters foreign investment, added the report.

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