The Central Bank and the International Monetary Fund (IMF) have both come out to deny that the government has devalued the naira to N290 to $1 as reported by New York based Sahara Reporters. The report also claimed that the devaluation was on the insistence of the IMF putting it as a condition for granting any loans.
Rumours have been rife that the CBN will devalue the naira after the Minister for State for Petroleum, Dr Ibe Kachikwu revealed that the new fuel price ceiling of N145 was arrived at by using an exchange rate of N285 as against the official rate of N197. Some analysts including Nairametrics believed that the government had no choice but to announce a devaluation after conceding that it can no longer provide forex to importers of petroleum products.
However, the Central Bank via its spokesperson Isaac Okoroafor has come out to deny it saying that “The rumour that the naira is going to be devalued is false,”. The IMF on the other hand has also denied it saying that there was no dialogue with the government on the subject matter. According to Reuters the a spokesperson for IMF was reported as saying “And so, there are no negotiations going on,” the spokesman said. “However, as we have said before, the Fund continues to have a productive dialogue with the authorities and we stand ready to help should the country make a request.”
This denial will do little to change the perception out there especially if they remember that the Vice President recently mentioned that the CBN may have to be more flexible in its exchange rate policy. This is evident in the price of the Naira at the parallel market which spiked to as high as N360 as at Friday in some parts of Lagos.
For now, the market is basically saying it will not be fooled by the denial and is getting ready for an official confirmation of the devaluation rather than sit back till an announcement is made before acting.