We Have Not Floated The Naira – CBN – TheNigerialawyer

The Central Bank of Nigeria (CBN) has denied reports and
speculations that it has floated the naira. In its rebuttal of the
claims yesterday, the apex bank maintained that the foreign
exchange policy remains unchanged.

The CBN, which has continued with its interventions in the
foreign exchange market with a recent injection of $210 million
into the inter-bank segment, said that it has not floated the
exchange rate.

It said: “There has been no change in Nigeria’s exchange rate
structure. The CBN has not floated the naira. The exchange rate
remains stable. Speculations and reports to the contrary are
false.” A floating exchange rate is a regime where the currency
price is set by the forex market based on supply and demand
compared with other currencies. This is in contrast to a fixed
exchange rate, in which the government entirely or predominantly
determines the rate.

The speculations were further fuelled by the Nigeria Customs
Service (NCS) which changed the exchange rate at which duties are
called from N306 to N326 to the dollar earlier this week. NCS
spokesman, Joseph Attah, who responded to queries on what prompted
the change in the exchange rate, said that the agency does not
determine the exchange rate. He said: “At NCS, any rate that is
fixed by the CBN is what we use.

The CBN has announced a new exchange rate and that is what we
are using. We don’t fix exchange rate. It is whatever rate that is
fixed by the CBN that we use,” he insisted. The CBN, however,
maintained that the exchange rate structure had not been changed.
The apex bank governor, Mr. Godwin Emefiele, had said that the bank
would continue to support the naira.

To support the naira, the CBN on Tuesday sold $210 million at
the inter-bank market. Figures showed that authorised dealers in
the wholesale segment of the market were offered $100million, while
the Small and Medium Enterprises (SMEs) received $55 million.

The sum of $55 million was allocated to customers requiring
foreign exchange for invisibles such as tuition fees, medical
payments and Basic Travel Allowances (BTA), among others.
LEADERSHIP recalls that at the last intervention on Friday (June 7,
2019), the bank injected the sum of $294.7million and
CNY31.4million into the Retail Secondary Market Intervention Sales
(SMIS) segment.

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