CBN denies devaluing Naira. It denied previous devaluations too

The Central Bank of Nigeria has denied devaluing the naira in a fresh attempt to unify the exchange rate.

The bank said a report by Daily Trust was “fake news” and was “speculative and calculated at causing panic in the market.”

Analysts expect a devaluation after President Bola Tinubu said the central bank must work towards a unified exchange rate. Mr Tinubu met with the bank’s governor, Godwin Emefiele, on Wednesday.

The paper reported Thursday that the CBN changed the exchange rate to N631 a dollar, from N461.6 at the Importers and Exporters (I&E) window, one of the platforms for foreign exchange trading.

It quoted a customer who said the central bank sold dollars to banks on behalf of their customers at N631 as against N461.6.

The CBN spokesperson Isa AbdulMumin said on Thursday the report was replete with “outright falsehoods and destabilizing innuendos”. He said the rate stood at N465 by Thursday morning.

– A pattern?

Pluboard has not confirmed the Daily Trust report – our review of rates on FMDQ, where foreign currencies are officially traded, showed that naira closed against the dollar at 464.67 on Wednesday.

But the CBN has a history of denying devaluations even when they have taken place.

In March 2020, the bank devalued the currency as the COVID crisis began to N380 a dollar, just a week after the CBN denied any plan to do so as “the market fundamentals do not support Naira devaluation at this time.”

Days after, Mr Emefiele claimed the action was an “adjustment not a devaluation”.

“CBN has a responsibility to see to the adjustment in the national currency. What you have seen is an adjustment in the country’s currency, (and not devaluation),” he said.

In May 2021, when the bank adopted the weaker I&E rate, effectively further devaluing by b7.6%, the bank also denied that was happening—even when finance minister Zainab Ahmed said otherwise.

The bank only indicated a change when it deleted the previous official fixed rate of 379 naira on its website. Two months earlier, Mrs Ahmed said the government had adopted the rate used by investors and exporters also called Nafex, which at the time was 410.25 a dollar.

Again, Mr Emefiele said the bank maintained the “official rate” of N379, while the Nafex rate of N410 was adopted for certain government businesses.