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N380 to US dollar is currency adjustment not devaluation – Emefiele

The Central Bank of Nigeria (CBN) sold U.S dollars to banks at N380/$1 as market defies interventions by the apex Bank.

The apex Bank Governor, Godwin Emefiele has made a clarification on the decision to peg the exchange rate of the Naira at N380 to a dollar.

He stated that the recent jump in forex rate was currency adjustment and not devaluation of Naira.

“market fundamentals do not support naira devaluation at this time” detailing reasons why it did not need to devalue. Having sold at N380 at the I&E window the CBN has officially accepted the exchange rate has now depreciated officially in line with a drop in oil price.

The CBN merged the rates at both the Bureau De Change rate and Import & Export window at N380.That means CBN would make the dollar available to the BDCs at N378, which would be sold at N380.

This was attributed to the Brent crude price which fell below $30 in the international market and this raised speculations among the BDC operators and Nigerians in general.

Speaking at an extraordinary bankers committee meeting comprising banks’ chief executive officers and CBN directors in Lagos, the CBN Governor said;

“The Central Bank of Nigeria has the responsibility to see to the adjustment in the currency; what you have seen is an adjustment in currency and we have been accused that we have a hand, we don’t have a hand, Emefiele said.

“We allow the I&E window, which is the dominant market to dictate the exchange rate in the market.

At this time the CBN provides FX in that market at 380, anyone who has higher than the 380 can go ahead, but it should be available in the market to fund the domestic market.

The new rate is only an adjustment. In economics and foreign exchange management language, it is not a devaluation.

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