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The Central Bank of Nigeria, CBN, has further officially devalued the country’s currency to N410.25/$ after exhausting all options to maintain the value of the naira.
Consequently, experts have expressed fear that the decision to chart the NAFEX Investor & Exporter forex window rate of N410.25 as its official exchange rate to the dollar would amount to inflation and increase the poverty level in Nigeria.
The new rate was confirmed by the apex bank on its website following the removal of N379/$ earlier in May.
CBN governor, Godwin Emefiele had said that the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria.
He had said, “In order to adjust for the decrease in the supply of foreign exchange, the naira depreciated at the official window from 305/$ to 360/$ and now hovers around N410/$.”
A former Director-General, Chartered Insurance Institute of Nigeria, Mr Richard Borokini, who spoke to Punch said this move was part of efforts to unify the exchange rates.
According to him, as long as some sectors such as the Bureau de Change got the dollar at differential rates, the unification would not be achieved.
A former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said ordinarily, the devaluation would not have made any difference, but now the BDCs would further increase their own rates because of shortage of forex for importation.
This post was written by Obiajulu Joel Nwolu.
The views expressed here belong to the author and do not necessarily reflect our views and opinions.