Value of Naira Tumbles By 51.95% Against Dollar Despite CBN’s Defence Measures

 

Over a period of 6 years, the naira depreciated 51.95 per cent in value to the dollar.

 

According to a report by Punch, the value of the naira to the dollar fell from 196.99 in December 2015 to 410 in April 2021.

 

This is despite the various foreign exchange policies introduced by the Central Bank of Nigeria to strengthen the currency.

According to a monthly document obtained from the CBN’s website, the value of naira at the inter-bank forex market stood at N196.99 as of December 2015.

 

The PUNCH had reported last month that the CBN officially adopted the NAFEX exchange rate of N410.25/$1 as its official exchange rate, devaluing the naira from N379/$.

 

In a move to achieve exchange rate stability and preserve the country’s forex reserves, the CBN in 2015 reviewed downwards the spending limit on the usage of naira-denominated debit cards for transactions abroad.

 

In a circular issued in April 2015 signed by the then Director of Trade and Exchange, Olakanmi Gbadamosi, the bank said the limit had been reduced from $150,000 to $50,000 per person annually, while daily cash withdrawals per person was pegged at $300.

 

After six months of implementing the policy, the value of naira in the official window remained stable at 197/$, but fell from 210/$ to 258/$ at the parallel market.

 

In June 2015, the CBN announced that it was stopping the supply of forex to 41 items that could be easily produced in Nigeria, a development that brought about the forex exclusion policy.

 

The implication of the policy is that importers of items on the forex restriction list would not be able to get forex directly from the windows created by the apex bank to bring the products into the country.

 

A circular issued by CBN said, “The implementation of this policy will conserve foreign reserves as well as facilitate the resurrection of domestic industries and improve employment generation.”