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Unification of exchange rates in Nigeria “imminent” – Wale Edun

The unification of exchange rates in the West African nation is “imminent.”

 

An influential member of the President Bola Ahmed Tinubu’s advisory board, Wale Edun, on Monday told Bloomberg after the country’s dollar debt surged following the surprise weekend suspension of the Central Bank of Nigeria (CBN) governor, Godwin Emefiele.

Nigeria’s international bonds jumped the most among emerging-market peers in trading on Monday which is a public holiday in the country with its longest-dated dollar debt rising to the highest since January.

The notes maturing in 2051 rose more than 3 cents on the dollar to as high as 73.74, the biggest gain this year.

The premium investors demand to hold Nigerian debt over US Treasuries fell 46 basis points to 710, the biggest drop this year, according to a JPMorgan index.

Recall that the CBN on June 1, 2023, had denied a report that it had devalued the Naira to N631 to the dollar.

Nigeria’s apex bank tweeted a graphical image with “fake news” to debunk a report by Daily Trust suggesting that it had devalued the Naira.

Daily Trust had reported that at the resumption of the weekly bidding for foreign exchange, the CBN sold the spot rate to banks on behalf of their customers at N631 to a dollar.

The devaluation, according to the report, came within 24 hours after the dollar had sold for N461.6 at the Importers and Exporters (I&E) window, news which the CBN debunked as fake.

President Tinubu during his inauguration at the Eagles Square in Abuja on May 29 had declared his government’s decision to unify the exchange rate in Nigeria.

Under Emefiele, the CBN offered the US dollar through several windows at tightly controlled rates, with little liquidity, to businesses and individuals.

This forced many to the black market, where the dollar traded more freely but at about a 60% premium to the official rate.

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