The Central Bank has been under pressure the devalue for one major reason. The wide margin between the black market and the interbank rate. Whilst no empirical analysis suggest whether a wider margin should always be accompanied by a devaluation some economist think it should.
Well, the CBN now has a loud and clear message for those looking at the parallel market and screaming devaluation
“There is need to deemphasize the parallel market. How can less that one percent be determinant of the rate? Most of those going that way are those that don’t want to be documented,” central bank spokesman Ibrahim Muazu said.
The central bank is basically saying to naysayers that it won’t be losing sleep to the parallel market, or thinly parallel market as Reuters put it in determining where the exchange rate should be.
The naira fell to about N239 at some parallel markets Thursday, as speculators continue to buy dollars in droves in anticipation of an arbitrage or a potential devaluation.