Naira to Trade N410/$1 at Interbank as FG Devalues Currency Again

March 23, 2021
naira at forex market

By Adedapo Adesanya

The Naira is set to trade at N410/$1 at the interbank segment of the foreign exchange (forex) henceforth as the federal government is adopting a new flexible exchange rate policy for official transactions in a move that shows the local currency has been devalued for the third time within a year.

On Monday, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said the country will now start to use the Investors and Exporters (I&E) rate for government transactions too.

Yesterday, the I&E or NAFEX rate closed at N410.13/$1 compared to N410/$1 at the previous session, indicating a depreciation of 13 kobo or 0.03 per cent.

The NAFEX rate was introduced in 2017 as a way of wooing foreign investors without formally devaluing the currency but Dollar shortages from low crude revenues have led the country to devalue its currency more than once since March 2020.

According to Mrs Ahmed, “Within the government and the central bank, there is only one official rate and that’s the NAFEX rate.”

This means the Central Bank of Nigeria (CBN) will no longer sell to commercial banks at N379/$1 it was quoted on Monday.

The adoption of the flexible-rate policy could assist discussions with the World Bank for a $1.5 billion loan that is partly conditional on currency reforms.

Meanwhile, transactions worth $25.88 million were recorded at the I&E market on Monday in contrast to $46.43 million last Friday, signifying a drop of $20.55 million or 44.3 per cent in the turnover.

At the parallel market, the Naira depreciated by N1 to sell at N486/$1 compared to N485/$1 it was traded at the preceding trading session, while against the Euro, it appreciated by N1 to sell at N582/€1 in contrast to N583/€1 of the previous session.

However, the domestic currency made no movement against the British Pound Sterling as it remained unchanged at N680/£1 on Monday.

At the cryptocurrency market, the outcomes were mixed as data obtained by Business Post showed that the Ripple (XRP), reeling on the back of news that court may rule that it is not a security but a currency, surged by 9.9 per cent to sell for N321.01.

Bitcoin (BTC) saw its value appreciate by 4.4 per cent to trade at 32,789,500; while the US Dollar Tether (USDT) gained 12.2 per cent to trade at N599.98.

On the loser’s end, the Ethereum depreciated by 0.2 per cent to sell at N1,025,500; the Litecoin (LTC) lost 7.1 per cent to trade at N107,000; the Dash (DASH) depleted by 0.2 per cent to sell at N125,000; while the Tron (TRX) lost 1.3 per cent to sell at N35.40.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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