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CBN devalues naira as market defies interventions




The Central Bank has technically devalued the naira to exchange to the dollar at N380 .
The apex bank took this decision after all interventions in the market , such as imposing sanctions on errant operators and use of moral suasion to curb illegal forex operations did not sustain the exchange rate of N360 .
In a circular to the operators in the sector , the CBN merged the rates at both the Bureau De Change rate and Import & Export window at N 380 .
Under the new dispensation , the CBN would make the dollar available to the BDCs at N 378 , which would be sold at N 380 .
The President, Association of Bureaux De Change Operators of Nigeria , Aminu Gwadabe , said the merger of the different rates became necessary to build confidence in the sector .
He said this would make it impossible for those dealing in illegal operations and speculators to be profitable .
Gwadabe said it was an unacceptable situation for operators to access the dollar below N 360 and be selling at between N 370 and N375 .
“There is a circular on it; we are to be buying at N 378 and sell at N380 , ” he said .
He said the rise in the exchange rate was not due to genuine demand because people were not really travelling or importing goods.
“The situation cannot remain like this ; things will improve. If coronavirus goes , we will get over it,” he said .
It would be recalled that in the previous week , the naira exchanged between N 405 and N 420 to a dollar in the BDC segment of the market .

This was attributed to the crude oil price which fell drastically in the international market and this raised speculations among the BDC operators and Nigerians in general .
ABCON had said the movement was as a result of recklessness on the side of the operators when they wanted to speculate .
It said there was no reason for that because the CBN had continued to maintain support for liquidity to the BDC subsector .
Before then , the CBN had maintained the exchange rate at about N360 for more than three years .
However , the CBN had said it was working with the fiscal authorities to properly ease the impact of the coronavirus and ensure a sound and stable financial system .

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