The Central Bank of Nigeria (CBN) may have adjusted the foreign exchange (forex) rate that officially devalues the Naira at the Nigeria Autonomous Foreign Exchange (NAFEX) window from N392/$1 to N410.25/$1 on December 31, 2020.
NAFEX is the FMDQ benchmark rate for forex spot operations in the Investors’ & Exporters’ (I&E) FX Window.
End-of-year trading report on the FMDQ platform showed that the Opening/Indicative rate of the Naira at the beginning of trading on Thursday, December 31, 2020 was N392.88/$, while the closing rate was N410.25/$.
The implication is that, exporters will now enjoy better deals, as income from exports, when changed to naira, will become more bountiful and rewarding at home. But for importers, it is a hell of time.
Spot transactions on the I&E window from January 1, 2021 will also be at the new exchange rate of N410.25/$, suggesting that individuals and corporate organisations will need more naira to buy the dollar henceforth.
While the FMDQ NAFEX window reflects the new exchange rate, the official exchange rate quoted on the website of CBN remained N379/$ as of the time of this report in the early hours of January 1, 2021.
The CBN devalued the exchange rate multiple times in the year that just ended as the apex bank strives to bridge the disparity between the official and parallel market rates.
The naira had remained stable at the parallel market – exchanging N470/$ in the last three days of forex trading according to AbokiFX, a daily exchange rate platform that tracks exchange rate performance outside the official window.
This is on the heels of Nigeria’s external reserve which increased by $515 million in 12 days, rising from $34.841 billion as of December 18, 2020, to $35.356 billion as of December 30, 2020.
