Forex constraint devalues naira to N380/$

Shortage of forex in the economy caused the naira to fall below the official rate of by 3.5 per cent to N380/$1 from N360/$1 according to the Central Bank of Nigeria.

The Deputy Governor, Financial Systems Stability Directorate, CBN, Aishah Ahmad, said this in her presentation at the last Monetary Policy Committee meeting.

She said,  “For instance, in response to supply constraints at the foreign exchange market, the exchange rate depreciated by 5.3 per cent from N360/$ to N380/$.

“Headline inflation inched up year-on-year to 12.34 per cent in April 2020 from 12.26 per cent in March 2020 – driven primarily by disruptions in food supply chains and exacerbated by restrictions imposed across the country to curb spread of the coronavirus.”

The CBN has however retained N360 as its official exchange rate on its website as of Friday.

“Furthermore, the manufacturing and non-manufacturing Purchasing Manager’s Indices declined significantly to 42.4 and 25.3 index points, respectively, in May 2020, compared with 51.1 and 49.2 index points in March 2020.

All of these signal significant challenges ahead for the economy.”