Nigeria’s central bank officially commented on the widely perceived devaluation of the naira from N307/$1 to N360/$1 at the official window. The CBN on its twitter handle said the currency was not a devaluation but an “adjustment of price.
“Governor, Godwin Emefiele clarifies supposed devaluation of Naira. Says it is an adjustment of price and not a devaluation of the currency.”
#FOREX #CBN Governor, Godwin Emefiele clarifies supposed devaluation of Naira. Says it is an adjustment of price and not a devaluation of the currency
— Central Bank of Nigeria (@cenbank) March 21, 2020
Nairametrics reported earlier today that the Central Bank of Nigeria had devalued its official exchange rate from N307/$1 to N360/$1. The apex bank has now reflected this change on its website signaling a confirmation. The bank is yet to issue a press release to this effect.
The CBN has now officially devalued by 15% moving from N307/$1 to N360/$1. Depreciation at the “market-determined” I&E window is 5% having moved from N360/$1 to N380/$1. Nairametrics also got hold of a letter from the CBN to banks informing them of the new exchange rate for dollars flowing from the International Money Transfer Operators (IMTOs). According to the CBN, IMTOs will sell to banks at N376/$1 while banks will sell to the CBN at N377/$1. The CBN will sell to BDC’s at N378/$1 while the BDC’s will sell to end-users at “no more than” N380/$1.
Reactions: Initial reactions to the CBN’s tweet drew some condemnation from some twitter users.
Call it whatever name. It needs to happen and it has happened.
— Victor Adegite (@VAdegite) March 21, 2020
Devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket.
CBN did this
— Kehinde Oyelade (@KehindeOyelade2) March 21, 2020
This is totally unnecessary @cenbank . Why play with words/semantics?
The reality remains the same
— The Revolutionary Seeker (WAEC) (@The_Seeker76) March 21, 2020
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Most analysts believe the central bank under Godwin Emefiele hates to use the term devaluation whenever there is an adjustment in the currency. In June 2016, Godwin Emefiele announced Nigeria was moving to a “flexible exchange rate” policy a move that increased speculation and worsened the currency situation. Similarly, in 2017 the CBN introduced the Investor and Exporter window allowing the exchange rate to trade at between N360/$1 and N366/$1 while it retained N305/$1 as its official rate. It also created other exchange rate windows.
The president of nigeria was reported to have said having gotten a second term he can now be brutal. I can see now. Naira is receiving the brutality. APC government will continue to make the poor poorer. Very sad. Devaluation, price adjustment are same. Godwin stop deceiving us.
Brutal? The Naira should be trading at over N400 (per as much as N500+) to the Dollar, based on market fundamentals alone. It’s time we quit subsidizing consumption and capital flight, and let the Naira find its real value. Perhaps when it is not so relatively ‘cheap’ to import everything and pay for foreign education and healthcare, we might just pay greater attention to domestic production and infrastructure.
The man, Godwin should remember that Nigerians are illiterates. If you say it is adjustment. Why is not to make the Naira stronger. Why must it be weaker. In as much you make the Naira weaker, it is devaluation. The fact remains that the poor masses are not being considered in making your policies. God can not be deceived.
All this English you are speaking makes naira to have no value again, it’s very bad. Please what ever you people are doing remember the poor masses, people are struggling please, call and massage you remove vats, withdraw money from the bank you remove percentage, oh Nigeria God please help us the masses. Please you should make things right and easy for us