Nigerian currency the Naira fell massively to N435 against the dollar at the official market on Friday.
NewsBeatng reports that this development followed the Central Bank of Nigeria (CBN’s) adjustment of the country’s exchange rate on its website in a move indicating another devaluation in the year 2021.
The Nigerian currency was adjusted in May 2021 by the apex bank from N379 to N411 per dollar in the (I&E) window.
Even though that adjustment occurred, Godwin Emefiele, the CBN Governor, promptly dismissed insinuations about naira devaluation, saying that Nigeria operates a managed-float exchange regime.
By definition, a managed float FX regime is when exchange rates fluctuate daily, but central banks attempt to influence the rate by buying and selling currencies to maintain a specific range.
Investigation revealed that the Naira which opened trading at an indicative price of N420.67 to a dollar, dropped to N435 at the end of Friday’s trading, according to FMDQ Security Exchange the official forex trading portal in Nigeria.
The spokesman of the CBN, Nwanisobi Osita, insists that the market determines the exchange rate.
“If you see N413, then that’s what it is. The market determines the rate,” Osita said.
The Naira however traded at the parallel market, between N560 and N570 to a dollar.
The CBN does not recognise the parallel market, otherwise known as the black market, and has directed anyone who requires forex to approach their bank, insisting that the I&E window is the only known exchange.