CBN buckles under IMF, World Bank pressure on exchange rate unification, Naira trade at N381 to dollar

Central Bank of Nigeria apparently buckled under pressure from International Monetary Fund, IMF and World Bank to unify the Naira exchange rate. The national currency, Naira, resumed trading on the official market at N381 to the dollar after there was no quotes for two straight sessions. The Central Bank finally unified the country’s multiple exchange rates.

The Central Bank of Nigeria has been under immense pressure both from the World Bank and International Monetary Fund for currency reforms, in order to qualify for budget-support loans, and from the Nigerian government, to get more Naira for its crude oil receipts to fund the budget and share to states and local government which allocation from the federation account has been dwindling. The World Bank is expected to approve a $3 billion budget- support loan for Nigeria in the coming months. Nigeria offered multiple foreign-exchange rates since the deregulation of the foreign exchange market in 1987 which it imposed to manage dollar demand after oil prices crashed in 1982. But dollar shortages have followed, stifling growth. 

No quotes were available on the Naira on the official market since Monday after the central bank last week weakened the currency at an auction. It later lowered the official rate by 5.5% from N360 on Tuesday. Traders said the central bank sold $100,000 at N380.50 on Wednesday on the official market. The Naira traded lower on Wednesday at N387.32 on the over-the-counter spot market, widely used by investors and importers. It weakened to N460 on the black market.