Nigeria’s currency has been long devalued, according to business leaders from manufacturers to importers who say they have been buying dollars at N630 since the beginning of May.
Their position contradicts that of the Central Bank of Nigeria, which on Thursday refuted claims by a local newspaper that the naira has been devalued and insisted the rate was still the N461 quoted on its website.
BusinessDay has, however, authoritatively gathered that the FX rate goes as high as N630 within the day, which is the rate at which several businesses buy dollars, but the rate mysteriously ends up at the CBN’s quoted N461 by the end of the trading day. This has been the case for over a month now, according to the business leaders who spoke to BusinessDay.
“We bid every two weeks. Last week’s CBN bid rate was actually N634-N636 officially,” one importer said. “Our government should always tell us the truth, the naira has been devalued officially; that’s the truth.”
The CBN has been given marching orders by Nigeria’s new President, Bola Tinubu, to work towards unifying the country’s multiple exchange rates which have hammered manufacturers and deterred foreign investment.
Tinubu met with Godwin Emefiele, CBN governor, on his first day in office after vowing in his inauguration speech that his administration will bring an end to the multiple exchange rate practice.
The market widely anticipated a move in the official rate after that and when it touched an intra-day low of N620 per dollar on Friday as against the N461 rate it opened on the day, it was seen as an indication of a shift in the CBN’s flawed FX management stance.
“The real question is why the CBN is fraudulently maintaining the unrealistic N461 rate when the market is already executing trades at a much weaker rate,” a market source who did not want to be named said. “There’s a lot of deceit in the air.”
Tinubu’s commitment to ensuring that foreign investors and companies can repatriate profits and dividends suggest the likelihood of more liberal FX policies, according to analysts at Lagos-based investment bank, Cardinal Stone.
“Consequently, we see scope for a downward repricing of the naira to a more manageable level at the I&E window to compensate for inadequate supply as the CBN works on a potential unification of exchange rates, in line with the President’s disposition,” Phillip Anegbe and Jerry Nnebue, analysts at Cardinal Stone, said.
The CBN’s spokesperson, when contacted for comment, said the apex bank will reveal its official stance on the rate soon.
The local newspaper, Daily Trust, which put out an article saying the CBN has devalued the official rate, has defended its position and has asked the CBN to refute its report with data.