The Central Bank of Nigeria has technically devalued the Naira by pegging the exchange to the dollar at N380 across all the FX market. In a circular released on Friday, the CBN merged the rates at both the Bureau De Change rate and Import & Export window at N380.
The CBN will merge the official rate, the rate for importers and exporters and rate for foreign-exchange bureaus, among others.
“Today we allowed the rate at the importer and exporters (I&E) window to adjust in response to market developments,” said a senior central bank official, confirming the bank changed the rate at the window for foreign investors to 380 naira per dollar from 366 naira per dollar.
The central bank has also allowed the official rate, which was pegged at 307 naira to the dollar to weaken closer to the market rate. Government dollar earnings from oil will now be converted to naira at the higher rate, a huge boost to revenues which has been hit by lower crude prices.
Nigeria operates a system of multiple exchange rates in a bid to control demand for dollars. The system, which has been criticized by the International Monetary Fund (IMF), has kept the official rate at about 307 naira per dollar. It uses this to supply cheap foreign exchange to government departments and select companies, including fuel importers.