Barely three months, after it moved naira’s official exchange rate to N168 from N155 to the dollar, the Central Bank of Nigeria (CBN) has officially devalued it again as the Ni­gerian currency will now be traded at the rate of N198 to one US dollar.

This came after a cocktail of measures to arrest its consis­tent fall in value, which led to the closure of the Retail Dutch Auction System (RDAS) and Wholesale Dutch Auction System (WDAS) foreign ex­change windows, failed to halt its slide.

In a message posted on its website yesterday, the apex bank raised the naira/US dol­lar official exchange rate from N168/$1 to N199/$1 even as the Senate yesterday predi­cated the 2015 budget on an exchange rate of N190 to the dollar.

Meanwhile, the foreign market continues to thread softly, as customers show un­willingness to buy at the pre­vailing high rate.
The naira exchanged at N222/$1 to slightly weaken the position on Monday by 1 per cent when it traded for N219.80/$1.

In recent times, CBN has decided to bar commercial banks from holding any part of their funds in US dollars at the close of each business day as it stepped up efforts to reduce pressure on the naira.

It had to review the policy twice later, pegging the expo­sure at 0.1 per cent and after much persuasion, went ahead to move the limit to 0.5 per cent.

The CBN, in November last year, devalued the naira as it moved the midpoint of the official window of the foreign exchange market from N155 to N168 to one US dollar, which forced it to exchange between N168 and N174 to the dollar at the foreign ex­change market.

The explanation given was that official devaluation of the naira became inevi­table as a result of reduction in government revenue from oil production and sales. The development was expected to increase the volume of naira available to the Federation Ac­count and to various levels of government to prosecute their local programmes.

But in its bid to calm the raging volatility observed in the forex market, as well as save the naira from further de­preciation, the CBN increased the weekly supply of dollars to Bureau de Change (BDC) operators from $15,000 to $30,000 per operator.

The banking sector regula­tor said the move was also part of measures to deepen the BDCs segment. The lat­est policy took effect from Wednesday, January 28, 2015 auction.

J.P. Morgan analysts had placed Nigeria on a negative watch for the next three to five months following reservations over the country’s foreign ex­change position and the bond market, which was described as illiquid.

Not ready to give up on its rescue mission, the CBN, which realised that domicili­ary transactions are used for round tripping by banks, di­rected that banks submit de­tails of domiciliary account holders, including name, ac­count number and balances as at January 29, 2015.

The banks were also re­quired to present total balance of all domiciliary accounts as at the same date, list of cor­porate domiciliary account holders and their balances, list of individual domiciliary account holders and their bal­ances, list of public sector in­stitutions domiciliary account holders and their balances as well as the mode of lodgement to the account transactions (ei­ther cash or by wire transfer).