Central Bank of Nigeria (CBN) Tuesday Devalue Naira New official exchange rate at N168 (US) dollar from Previous N155., Raises interest rate, cost of doing business to rise, Food, other items to cost more, Dollar exchanges for N185 in Lagos, Abuja THE Central Bank of Nigeria (CBN), on Tuesday, devalued the Naira, setting the new official exchange rate at N168 to the United States (US) dollar from its previous rate of N155. This was in a bid to rescue the currency, whose recent free-fall had been fuelled by global oil price decline and high dollar demand.
At its Monetary Policy Committee (MPC) meeting in Abuja, the apex bank also reviewed the Monetary Policy Rate (MPR), the rate at which it lends to commercial banks, from 12 per cent to 13 per cent. Analysts have opined that the combination of the two moves would result in an increase in the prices of both imported and local commodities, while banks’ lending rate will climb up. The bank devalued the naira by 7.7 per cent, thus widening the target band of the currency by 200 basis points from +/-3 per cent to +/-5 per cent, moving it to N160-N176 to the US dollar from the previous N150-N160 band, consequent upon prolonged naira weakness and high dollar demand. SEE MORE ON PAGE 2