The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has revealed that the naira has depreciated at the official market to N410 against the dollar.
According to the CBN Governor, the Federal Government hopes to take a more dramatic step to increase exports in order to earn foreign exchange to boost the dollar supply.
Emefiele made this disclosure while speaking at a special summit on the economy organized by Vanguard Newspaper; in collaboration with the CBN and Chief Executive Officers of banks on Friday, February 26, 2021, in Lagos.
The CBN Governor said the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria.
He said, “In order to adjust for the decrease in the supply of foreign exchange; the naira depreciated at the official window from N305/$ to N360/$ and now hovers around N410/$.’’
The Vice President, Prof. Yemi Osibanjo, who was part of the event said the Federal Government would address the shortage of foreign exchange.
He said, “We have accepted that we need to take a more dramatic step; to boost exports in order to earn foreign exchange.’’
While pointing out that the government would combine limited resources to expand the supply base; Osibanjo said the Federal Government would ensure the expansion and promotion of export trading houses; ensure that companies in the special economic zones exported most of their productions; as well as expand the export grant scheme.
It was gathered that two weeks ago, the exchange rate between the naira and the dollar was adjusted; at the Investors and Exporters window where forex is traded officially; as it had closed above N400/$1 since the second week in February.
An exchange rate of N400 and above is perhaps a confirmation that official exchange rates across the multiple windows are crawling towards the target Non-Deliverable Forward (NDF) rates approved by the CBN.
The CBN had maybe set the stage for the recent depreciation of the naira; when on February 2nd it revised its one-year Non-Deliverable Forwards (NDF); for which it intends to settle foreign exchange futures contracts.