I can understand the retention of $38 oil benchmark. What gets to me is the CBN approved N197/US$ currency conversion rate. Can any economist explain to me the real idea behind having a CBN currency conversion rate and a parallel market rate? Does this apply in America, Germany, China or the United Kingdom that I am unaware of? I am totally baffled. What is the point in having one rate for the government and another rate, a higher one for the citizens the government is supposedly meant to look after? I am desperate to understand this logic. This is incredulous. It all looks shady to me. Banks getting the dollar at a reduced rate, pass it on to dealers at a higher rate. They make a profit from the added margin. The Bureau de change operators add their margin before it eventually gets to Nigerians on the street. It smells of currency trading to me at the highest level – the Central Bank of Nigeria. CBN is proud to announce the Naira is stable at N197/US$ while it yo-yos in the black market which produce the alternative rate officially christened the parallel market rate of N321/US$. What is stable in having a disparity of N124/US$? I just don’t get it and I really want to. Please help me to the difference between the CBN and parallel rates. Simple! – Jide Salu
Meanwhile, NAN has reported that the Naira on Friday traded at N321 to the dollar at the parallel market.
The News Agency of Nigeria (NAN) reports that the Naira remained stable at N321 for almost a week.
However, the Pound Sterling and the Euro exchanged at N467 and N365 respectively.
Meanwhile, the Naira remained at N197 to the dollar at the official Central Bank of Nigeria (CBN) rate.
Traders attributed the stability in the price of the Naira to activities of currency hoarders who anticipated a new policy direction with the passage of the budget.