Another devaluation of the Nigerian Naira against global counterparts might happen soon as available data presently showed the Naira is trading at N422.59 against the United States Dollar on the Investors and Exporters Foreign Exchange Window.
The Naira plunged from N390 it exchanged on Tuesday to N422.59 against the US dollar on Wednesday following the Federal Government’s refusal to devalue the Naira for the fourth time in the last one year.
President Muhammadu Buhari had disagreed with the International Monetary Fund’s call for another Naira devaluation to ease pressure on the nation’s foreign reserves and aid investment inflow.
According to Bloomberg, the decision to artificially sustain the Naira despite weak economic indicators and market expectations for further devaluations is dragging on the nation’s investment inflow and recovery process.
It said “The disagreement underscores the policy challenges for the administration that has resisted growing calls from some businesses and state governors hurt by an artificially overvalued currency to liberalize the exchange rate. It also conflicts with market expectations for further devaluations after the central bank cut the value of the naira by nearly a quarter last year when oil prices collapsed during the pandemic.”
Investors on the window traded $49.07 million in volume.
While the CBN official exchange rate remained N379 against the United States Dollar, investors can only access the dollar at N423 despite CBN’s regular intervention at the window.
The Central Bank of Nigeria on February 5, 2021 directed all financial institutions in the country to discontinue business with cryptocurrency exchanges and report any bank accounts dealing in cryptocurrency.
The new directive pointed to a central bank struggling to curb capital outflow in an effort to fast track economic recovery and stimulate growth from within.
At the parallel market, the Naira exchanged at N480 to a United States Dollar on Wednesday and N655 against the British Pound.
Against the European common currency, it sold at N575 per unit.
