Devaluation

The Central Bank of Nigeria (CBN) has refuted trending news that it had devalued the naira to about 630 naira to a dollar.

The report of the currency devaluation was earlier reported by one of the national dailies.

However, in statement on Thursday, the bank’s Acting Head of Corporate Communications, Dr Isa Abdulmumin, described it as falsehood.

“The news report, which in the imagination of the newspaper is exclusive, is replete with outright FALSEHOODS and destabilizing innuendos, reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market,” he said.

The statement further adds that for the avoidance of doubt, the exchange rate at the Investors’ & Exporters’ (I&E) window traded this morning (June 1, 2023) at N465/US$1 and has been stable around this rate for a while.

The apex bank cautioned Nigerians to ignore the claims in its entirety, as it is speculative and calculated at causing panic in the market.

Vice President Yemi Osinbajo has not called for the devaluation of the Naira but only argues argued against a willy-nilly devaluation of the Naira.

In a statement on Tuesday, Mr Laolu Akande, Senior Special Assistant to the President on Media & Publicity Office of the Vice President, said attention had been drawn to media reports that Osinbajo was drumming support for devaluation.

“Osinbajo is not calling for the devaluation of the Naira. He has, at all times, argued against a willy-nilly devaluation of the Naira.

“For context, the Vice President’s point was that currently the Naira exchange rate benefits only those who are able to obtain the dollar at N410, some of who simply turn round and sell to the parallel market at N570.

“It is stopping this huge arbitrage of over N160 per dollar that the Vice President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in about 40% profit!

“This was why the Vice President called for measures that would increase the supply of foreign exchange in the market, rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.’’

He said that it was a fact that foreign investors and exporters have been complaining that they could not bring foreign exchange in at N410, and then have to purchase foreign exchange in the parallel market at N570 to meet their various needs on account of unavailability of foreign exchange.

“Only a more market reflective exchange rate would ameliorate this. With an increase in the supply of dollars, the rates will drop and the value of the Naira will improve.

“The real issue confronting the economy on this matter is how to improve the supply of foreign exchange, but this will not happen if we do not allow mechanisms like the Importers and Exporters window to work. 

“If we allow this market mechanism to work as intended, we will find that the Naira will appreciate against the dollar as we restore confidence in the system.’’