Nigeria’s apex bank, The Central Bank of Nigeria (CBN) has further devalued the local currency (Naira) bowing to demand pressure.
Reports from Bloomberg Stated that the CBN raised the rate at the Secondary Market Intervention Sales (SMIS) – a window where importers access foreign currencies – from N360/$1 to N380/$1 with an instruction to bidders to comply accordingly.
The development however contradicts the CBN Governor, Godwin Emefiele statement 2 weeks back were he [Emefele] hinted that the apex bank was moving towards ending the multiple-rate regime.
However Control TV gathered that allegations that the bank was pressured to devalue the naira was not true, A source at CBN says the bank was not under pressure to devalue the naira that it was just coincidental with the conditions set up by two institutions, wanting the CBN to unify its exchange rate regimes and devalue its currency.
Source Stated:
“Remember that in 2017, we needed a loan from them. They insisted and we told them no and we went for Euro bond. We could still have gone elsewhere if we were not desirous of adjusting our rate, which is our core strategic action undertaken from time to time, depending on the economic realities.
“So, we did it at this time and it just merely coincided with the time we are seeking assistance from them. Please, ignore such insinuations. The adjustment here had nothing to do with IMF. After all, IMF has already released its own funds to us. So, it has nothing to do with either the IMF or the World Bank or their assistance.”
Also, Godwin Owoh, a professor of applied economics, said rate unification and devaluation are rooted in the corrupt practices and market manipulation that have destroyed the naira over time.
Owoh said a detailed structural audit of the management of the market is more important than rate harmonisation.
He also called on the government to embark on a holistic “currency and lifestyle audit” as necessary measures to save the naira from continuous depreciation.
(C) Control TV 2020.
