The Central Bank of Nigeria, CBN, has
announced a new official naira-to-dollar
exchange rate, forcing down the
Nigerian currency by 13 naira, as the
country struggles to reshape its fiscal
policies in response to dwindling oil
price.
The bank devalued the naira at its
monetary policy committee, MPC,
meeting on Tuesday in Abuja, where it
also reviewed Nigeria’s monetary policy
rate from 12 per cent to 13 per cent.
The monetary policy rate highlights
lending rate for the country’s economy.
The naira will now exchange officially at
N168 to a dollar, and no longer N155,
the bank said.
The bank also moved the private cash
reserve ratio from 15 per cent to 20 per
cent, while retaining public sector cash
reserve ratio at 75 percent.
The CBN said the decision to lower the
value of naira against the dollar is to
strengthen the currency.
Mr. Emefiele noted the continued drop
in global crude oil prices and reiterated
the call on the government and the
National Assembly to speed up the
process towards the immediate passage
of the Petroleum Industry Bill, PIB,
which has been pending passage for the
past two years.
The committee urged the government to
take advantage of the declining oil prices
to cut down on subsidies on supply of
petroleum products in the 2015 budget,
while states and Local Government
should step up efforts to boost their
internally generated revenue and reduce
reliance on revenues from the federation
account.
The CBN governor assured that the bank
remained committed to maintain
financial system stability, while warning
against speculative activities that drive
inflation.

How can devaluation strengthen the naira bike? Rather it will only help protect the reserve assuming demand reduces.