The
Central Bank of Nigeria, yesterday, devalued the national currency, the
Naira, as it moved the midpoint of the official window of the foreign
exchange market from N155 to N168 to the one US Dollar.
This
means that the Naira will exchange between N168 and N174 to the dollar
at the foreign exchange market. Official devaluation of the naira became
inevitable as a result of reduction in government revenue from oil
production and sales. The devaluation will increase the volume of Naira
available to the federation account and to various levels of government
to prosecute their local programmes.
The CBN
Monetary Policy Committee also, yesterday, raised the interest rate
benchmark from 12 per cent to 13 per cent, thus signalling that interest
rates charged by banks will go up further than they are now. The apex
bank monetary policy committee further raised the cash reserve
requirement for non-government deposits in banks to 20 per cent from its
previous 15 per cent position while retaining the cash reserve
requirement of 75 per cent for government and their agencies’ deposits
in banks.
Briefing the press on the outcome of the 98th meeting
of the Monetary Policy Committee, in Abuja, CBN Governor, Mr. Godwin
Emefiele, said that the combination of low accruals into the nation’s
foreign reserves, owing to falling oil prices at the international
market; continual depletion of the reserves; and high demand at the
foreign exchange market made it difficult for the apex bank to continue
to defend the Naira.
“All the 11 members voted to move the
midpoint of the official window of the foreign exchange market from
N155/US$ to N168/US$”, he said.
The CBN boss regretted that the
high demand at the forex market was the handiwork of speculators and
threatened to deal with those found to be involved in infractions. The
wide gap between the exchange rate of N155 to $1 at the official market
and about N178 to $1 at the Bureaux the Change made round tripping
obviously very attractive.
Credit: Omoh Gabriel, Emma Ujah/Vanguard
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