By Bukola Idowu & Mark Itsibor
The Central Bank of Nigeria (CBN) has officially adopted the Nigeria Autonomous Foreign Exchange (NAFEX) rate, devaluing the naira to N410 to the dollar even as the value of the naira depreciated to N486 at the parallel market.
The CBN had earlier this month removed the N380 per dollar exchange rate from its website spurring rumors of a pending devaluation.
Yesterday, on its website, it put the NAFEX rate, which is also known as the Investors’ and Exporters Window (I&E) at N410.25.
On the FMDQ website, the NAFEX closing rate was N411.25 to the dollar, whilst at the parallel market, the value of the naira had depreciated to N486 from N484 to the dollar which it began the week with.
The World Bank and the International Monetary Fund has over the years stressed the need for the CBN to hands off the exchange rate and eliminate the multiple rates in the country.
President of the World Bank, David Malpass, last week, had noted that “the multiple exchange rates has been a burden on the people of Nigeria, and we’ve encouraged the elimination of the official rates and the unification of rates so that money and investment and remittances can flow in and out of Nigeria with less friction.”
CBN Governor, Godwin Emefiele, at the March 2021 Monetary Policy Committee meeting had mentioned that it had not intervened in the I&E window since January this year, noting that, Nigeria has not changed from its foreign exchange management policies.
The I&E window was established in 2017 with the aim of creating an efficient and effective price discovery in the Nigerian forex market.
Meanwhile, the Monetary Policy Committee of the Central Bank of Nigeria…
