By Modupe Gbadeyanka
The Central Bank of Nigeria (CBN) may have finally bowed to immense pressure from various quarters to devalue the Naira.
Few days ago, there were speculations that the central bank would devalue the local currency, following crash in the prices of crude oil at the global market and steep decline in the foreign reserves.
This created panic at the currency market and caused the Naira/Dollar exchange rate to shoot as high as N400/$1 at the black market. The value only retreated to N375/$1 at the parallel market on Thursday after the CBN had maintained that it was not going to carry out exchange rate realignment.
Yesterday, the Presidential Economic Advisory Council held a meeting with President Muhammadu Buhari and he was bluntly told that the current economic situation in the global could force Nigeria to devalue the local currency.
Same yesterday, the CBN auctioned OMO bills worth N150 billion, but foreign investors, who are qualified to buy the investment tool, snubbed the exercise, forcing the apex bank to declare a No Sale.
On Friday, Reuters said the central bank sold forex to Jaiz Bank Plc at N360/$1 instead of the official rate of N306/$1, “implying a 15 percent devaluation.”
Quoting traders as its source of information, the reputable foreign media platform said “no quotes were shown on Friday for the Naira on the official market, which has been supported by the central bank for more than two years.”
It stated further that today, only few trades were done on the Naira at N380/$1 on the over-the-counter spot market for investors on thin liquidity.
Last week JP Morgan said it expected Nigeria to devalue its currency by around 10 percent to N400/$1 by the end of June after a sharp oil price tumble ramped up the pressure on Africa’s biggest economy.
Reuters said the central bank was not available for comment.
Adedapo Adesanya