CBN adjusts Forex peg to N196.98/$1

By BusinessNews Staff on October 14, 2015

The Central Bank of Nigeria (CBN) strengthened its exchange rate peg slightly to N196.98 against the dollar on the interbank market on Monday, from N197 to a dollar it set last week, traders said.
According to Reuters, the regulator sent a message announcing the adjustment, which is the eighth since the bank introduced tight currency controls in February. The central bank has resisted calls to further devalue the naira in the face of a plunge in vital oil revenues. It devalued the currency last November and later pegged the exchange rate in another de facto devaluation. It had however, resorted to rationing dollar supply by restricting access to hard currency for import of certain items, frustrating businesses.

Vice president Yemi Osibanjo had said Africa’s biggest economy will keep the currency restrictions for now to preserve the country’s foreign reserves but will eventually relax them.
On the parallel market, the naira closed flat at N224 to the dollar on Monday. The bank has been selling dollars twice a week to the parallel market since July, traders said, citing that the regulator is keen to narrow the spreads in both markets.