Naira Weakens Further As CBN Adjusts Exchange Rate To N413.49 Per Dollar

The Central Bank of Nigeria has adjusted the exchange rate on its website from N411 to N413.49 to a dollar.

This is the lowest the Naira has fallen at the Investors and Exporters Window in recent times after the apex bank tinkered with the exchange rate.

The move by the CBN may have given an indication that the apex bank has further devalued the country’s currency.

In May, the apex devalued the naira from N379 to N411.00 per dollar after adopting the Investors and Exporters (I&E) window rate, also known as Nafex rate.

At the close of business on Friday, being the last day of 2021, naira recorded no movement against the United States dollar at the official market.

It closed at N435.00 to a dollar, the same rate the currency exchanged hands with the dollar on Thursday, data published on FMDQ securities exchange windows where forex is officially traded showed.

At the unofficial market, the Naira is trading at about N570 per dollar

The Vice President, Yemi Osinbajo, had in November during the Mid-term Ministerial Review disagreed with the Central Bank of Nigeria’s forex policy.

Osinbajo had said, “As for the exchange rate, we have to move our rates to a more reflective market as possible in my own respective view is the only way to improve supply.

“We can’t get new dollars in the system where the exchange rate is artificially low and everyone knows how much our reserves can grow.

“So, I am convinced that the demand management strategy currently being adopted by the CBN needs [a] rethink and that’s just my view about that. But anyway, all those are issues I am sure that when the CBN has time to address, it will be able to address in full.”

President of the Association of Capital Market Academics of Nigeria, Prof Uche Uwaleke, had called for caution given the fragilities, structural imbalances and vulnerabilities in the Nigerian economy which are yet to be addressed.

Uwaleke said, “Weakening the naira at this time will have grave consequences for the 2022 budget proposal and by extension the capital market.”