By Amadin Idahosa and Joshua Tasie
The latest exchange rate of the naira against dollar is currently placed at N379, from the initial N361 to the dollar which has been stable in the past five months.
The fall it was gathered is because the Central Bank of Nigeria, CBN, had agreed with the IMF to unify the exchange rate as part of the conditions for accessing $3.4 billion IMF loan in May.
The adjustment was carried out by the CBN which noted that the official exchange rate was in line with the banks earlier commitment to the International Monetary Fund, IMF proposal.
The loan, which came under the Rapid Financing Instrument, RFI, was meant to assist Nigeria’s fight against COVID-19 and resolve urgent balance of payment needs.
In a letter to the IMF, the Federal Government had assured that it would work towards “full exchange rate unification and greater exchange rate flexibility” to help preserve foreign exchange reserves and avoid economic dislocation.
The new official exchange rate now displayed on the CBN website is closer to the N381/$ being traded on the Secondary Market Intervention Sales, SMIS window.
The SMIS is the market where importers bid for forex using letters of credit and Form M.
Pointing out some reasons for the adjustment, CBN hinted that with the subdued oil revenues, it would help boost funds available to the federation accounts allocation committee for disbursement to the three tiers of government.
However, the naira closed at N475 to dollar at the parallel market where a large part of the demand for dollars have shifted to.
It would be recalled that the CBN had also devalued the currency in March, when it adjusted the official peg against the dollar to N360 from N307.
This, however, CBN Governor, Godwin Emefiele, said at the time the move was “an adjustment of price and not a devaluation of the currency.”
Foreign investors, IMF and Wor
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