CBN Breaks Silence On ‘Policy’ To Crash Exchange Rate To N1.25/$

The Central Bank of Nigeria (CBN) says it is not planning to introduce a new naira policy that will crash the dollar exchange rate to N1.25 kobo.

On Wednesday, a report circulating online claimed that the apex bank is mulling a new FX policy.

According to the report, the policy is scheduled for November 2023 and will “better anchor inflation expectations and make for easier conversion to other major currencies”.

The report also said the policy will “reverse the tendency for currency substitution” as well as “eliminate higher denomination notes with lower purchasing power”.

As of Tuesday, the exchange rate was N742.10 to the dollar at the investors’ and exporters’ (I&E) window — Nigeria’s official FX market.

Commenting on the report in a statement on Wednesday — accompanied by a screenshot of the report — the CBN said the publication is false.

“The Central Bank of Nigeria would like to bring to your attention that the attached message currently circulating on social media is false and should be disregarded,” the apex bank wrote in the statement posted on X, formerly Twitter.

The financial regulator has been rolling out policies to reform the FX market since President Bola Tinubu was sworn in at the end of May 2023.

The Central Bank of Nigeria would like to bring to your attention that the attached message currently circulating on social media is false and should be disregarded. pic.twitter.com/zTPItiQ2ea

— Central Bank of Nigeria (@cenbank) September 13, 2023

Some of the policies include the cessation of restrictions on deposits into domiciliary accounts, and unification of the multiple exchange rates systems which has led to the devaluation of the naira.

The devaluation of the naira has pushed the price of the dollar in the investors’ and exporters’ (I&E) window of the official market from N461.50/$1 on June 13, to N742.10/$1 as of Tuesday.