Central Bank of Nigeria (CBN) weakened the naira to a record low during trading at the investors and exporters market yesterday. The naira closed at 410.25 naira per dollar at the I&E window, according to the website of the Lagos-based FMDQ OTC Securities Exchange, a platform that oversees foreign-exchange trading in Nigeria.
On the spot market, naira traded for 400.25 to the dollar as of 3:25 p.m. in Lagos. The naira sold for 470 per dollar on the street since Tuesday, according to abokifx.com.
Both the International Monetary Fund (IMF) and World Bank have intensified calls on Nigeria to speed up currency reforms in order to achieve economic growth. The IMF said a unified and flexible exchange rate will ease external imbalances and bolster activity, while the World Bank asked for a change of foreign exchange policies for the government to get a $1.5 billion loan from the multilateral lender. Calls to the central bank’s spokesman seeking comment went unanswered.
Several foreign exchange rules have been introduced recently by Africa’s largest crude producer. These include asking international money transfer operators to pay remittances in dollars to beneficiaries, to boost dollar liquidity in the country after supply of the greenback dried up due to a plunge in oil prices. Crude exports account for more than 90 per cent of foreign-exchange earnings in Africa’s largest economy.
Abuja-based banking regulator has devalued the naira twice this year by 24 per cent from an official rate of 306.5 in January. The latest change on FMDQ will be third.
United Capital sees the currency depreciating to as much as 415 naira to the dollar in 2021. “There is a need to ultimately adjust the naira to that level for stability to come back,” Wale Olusi, head of research at United Capital said by phone.