All measures prescribed by the Central Bank of Nigeria to regulate and stabilize the erratic fluctuation of the naira exchange rate has failed.
A report published by Global Finance titled “Central Banker Report Cards 2021: The Art Of Timing”, disclosed this information.
In terms of performance ranking, Global Finance scored the CBN a grade C, preserving the same rating of last year despite a torrid forex year in 2021. Last year, naira’s exchange rate to the dollars oscillated irregularly, with the highlight of the September Monetary policy rate (MPR) meeting being a currency manipulation accusation centered on AbokiFX.
The report recognized the resilient efforts from the apex bank to achieve equilibrium in the foreign exchange market. However, results haven’t been forthcoming.
Texts from the report: ,“Nigeria’s central bank has engaged in deliberate measures to ensure the stability of the Naira. The measures have included a tight grip on the local currency and even halting the sale of forex to bureau de changes. Unfortunately, the measures have not borne the desired fruits. In early September, the Naira was on a free-fall hitting a record low of N532 to the dollar.”
“In many aspects, the volatility of the Naira is synonymous with the reign of Emefiele, which since 2014 has been characterized by rising inflation and tremors in the banking industry.”
Meanwhile, the report also acknowledged the CBN’s breakthrough in financial market with the launch of the eNaira, the first Digital currency in Nigeria.
“In July, the apex bank held its benchmark rate at 11.5% for a fifth straight meeting. The decision was informed by the fact that the current situation neither gives room for tightening as it will hurt output growth nor, loosening, as it will exacerbate inflationary pressures. In June, inflation stood at 17.75%, well above the bank’s ceiling. Notably, the bank is gearing to launch a digital currency, e-Naira.”
Currently, the issue of forex rate fluctuation and gap between the official and parallel market rate remains a huge problem. With data from bureau de change operators disclosing in the past week, naira has traded to the dollar from N566-N570/$1. In the official Investors and Exporters (I&E), naira was last quoted to dollar at N416.25/$1.