• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home highlights

Nigeria adopts flexible exchange rate suggesting another devaluation of the naira

4 years ago
in highlights, Home, home-news, latest News, Markets
2 min read
0 0
0
52
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

The Federal Government has announced the adoption of a new flexible exchange rate policy for official transactions in a major foreign exchange policy shift.

This move which effectively suggests the third devaluation of the naira within a year will see the government adopt the NAFEX rate for its official transactions.

According to a report from Bloomberg, this disclosure was made by the Minister for Finance, Budget and National Planning, Zainab Ahmed, in a chat with the press on Monday, March 22, 2021, in Abuja.

Ahmed said the government will start to use the flexible rate that has until now applied to investors and exporters for government transactions too.

The investors and exporters window, which is generally referred to as NAFEX, has since the beginning of the year averaged N410 to the dollar as against the Central Bank of Nigeria’s old fixed rate of N379 to the dollar.

Ahmed said, “Within the government and the central bank, there is only one official rate and that’s the Nafex rate.’’

This new policy measure by the Federal Government will come as a welcome development to the World Bank and the International Monetary Fund (IMF), who have always pushed for the abolition of multiple exchange rate and the adoption of a unified and flexible exchange rate regime.

RelatedPosts

CID Establishes Task Force to Combat Influx of Stolen Vehicles into Ghana

Government Reintroduces Free Cocoa Fertiliser Programme to Boost Sector Growth

President Mahama Directs Ministers to Fast-Track Rollout of Ghana’s E-Visa System

Despite the devaluing of the naira twice since March 2020, most economic and financial analysts had called for further devaluation of the naira in order to close the gap between the official rate and the black market rate.

The new policy measure is expected to ensure more transparency in the Federal Government’s management of the foreign exchange market.

The adoption of the flexible-rate policy could have a positive impact on the Federal Government’s discussions with the World Bank for a $1.5 billion loan that is partly conditional on currency reforms.

A weaker naira will boost Nigeria’s revenue from oil, which has been converted at the fixed official rate. Earnings from oil exports account for about 60% of Nigeria’s revenue and about 90% of foreign-exchange earnings.

It is, however, yet to be seen if the adoption of this new policy measure will reduce the exchange rate disparity between the official rate and the black market rate.

What you should know

  • The NAFEX window, which is referred to as Nigerian Autonomous Foreign Exchange, was introduced by the CBN in 2017 as a way of attracting foreign investors without formally devaluing the currency. Investors who wish to repatriate their funds have recently complained about dollar shortages.
  • Ahmed had said that the CBN is clearing a backlog of demand for dollars by releasing some certain amounts every month. The International Monetary Fund estimated the backlog at about $2 billion in February.

Source: nairametrics
Via: norvanreports
Tags: Central Bank of Nigeriadevaluation of the nairaforeign exchange marketmajor foreign exchange policy shiftNAFEX rate for official transactionsnew flexible exchange rate policyZainab Ahmed
No Result
View All Result

Highlights

AngloGold Ashanti Doubles Earnings and Free Cash Flow on Higher Gold Prices, Production Surge in Q2 2025

Africa’s Richest Country to Boost Continental Trade Ties After U.S. 30% Tariff Hit

Nigeria Hits Panic Button as West Africa Logs $2.1bn in Suspicious Crypto Transactions

CID Recovers 43 Stolen Luxury Vehicles Smuggled into Ghana

2025 Mid-Year Economic Review: Fiscal Discipline is a Necessary Pain

Ledecky’s Heroics Highlight Underwhelming US Campaign at World Aquatics Championships

Trending

Business

CID Establishes Task Force to Combat Influx of Stolen Vehicles into Ghana

August 4, 2025

CID Establishes Task Force to Combat Influx of Stolen Vehicles into Ghana The Criminal Investigations Department (CID)...

Government Reintroduces Free Cocoa Fertiliser Programme to Boost Sector Growth

August 4, 2025

President Mahama Directs Ministers to Fast-Track Rollout of Ghana’s E-Visa System

August 4, 2025

AngloGold Ashanti Doubles Earnings and Free Cash Flow on Higher Gold Prices, Production Surge in Q2 2025

August 4, 2025

Africa’s Richest Country to Boost Continental Trade Ties After U.S. 30% Tariff Hit

August 4, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.