CBN Devalues Naira , See Current Dollar to Naira Exchange Rate Today.
Report has it that Naira has been devalued by the Central Bank of Nigeria (CBN), with the new exchange rate set at N631 to the dollar, compared to the previous rate of N461.6 at the Importers and Exporters (I&E) window. This devaluation follows President Bola Ahmed Tinubu’s announcement of the government’s plans to unify the country’s exchange rate in order to stimulate the economy.
Note the above exchange rate is the official CBN Rate (N631 to $1), meanwhile, the Black Market Exchange Rate for today is N900 to $1.
President Tinubu, in his inaugural speech after being sworn in as the 16th president, emphasized the need for a unified exchange rate and a thorough reform of monetary policy. He highlighted that such measures would redirect funds from arbitrage activities into productive investments that support the real economy, including investments in infrastructure, equipment, and job creation.
The disparity between the I&E window and the parallel market had created opportunities for round-tripping and other unethical practices, prompting the CBN to implement measures to address the situation. As part of these measures, the CBN has ceased the sale of foreign exchange to Bureau de Change operators.
President Tinubu held meetings with strategic institutions, including the CBN Governor, Godwin Emefiele, where the issue of the exchange rate was discussed. Additionally, the removal of petrol subsidy was reportedly a topic of discussion during President Tinubu’s meeting with the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari.
The CBN recently resumed the weekly bidding for foreign exchange, with the spot rate set at N631 per dollar. Many bidders received the full amount they requested at this rate, according to a customer interviewed. The devaluation has also led to a decrease in prices at the parallel market, with rates dropping from N750 to N745 per dollar in Abuja and Kano.
Anticipating a potential change in exchange rate management under President Tinubu’s administration, the naira weakened in the parallel market, reaching its lowest level in a year at N762 per dollar.
Over the past three years, the exchange rate differential between the official and parallel markets has widened significantly, reaching over N400 per dollar at some point. Such a wide gap raises concerns about unhealthy market manipulation and its negative impact on market stability efforts, as highlighted by development institutions like the International Monetary Fund (IMF).
Between 2020 and 2022, the CBN intervened in the foreign exchange market, spending approximately $42 billion to stabilize the naira. However, these interventions were carried out at official rates that differed significantly from the effective exchange rate of the naira. The CBN’s Financial Stability Report reveals that $9.2 billion was sold in the market during the first half of last year.
