Nigerian naira falls to 302 per dollar as forex reserves drop to $28bn

The Nigerian naira fell to N302 to a dollar on Tuesday as the country’s central bank refused to heed calls for devaluation of its currency. The official exchange rate remained at N197 to a dollar.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) ended its meeting, yesterday, but left all instruments unchanged.

CBN Governor Godwin Emefiele told reporters after the meeting in Abuja, that the MPC held the policy rate at 11 percent after lowering it from a record 13 percent in November.

“The current episode of lower oil prices is expected to remain over a very long period. Consequently, it is imperative to brace up for a longer period of low government revenues from oil sources which will necessitate hard and uncomfortable choices,” Emefiele said.

Nigeria whose major foreign exchange earner is oil has been affected by slump in prices. The country’s foreign reserve currently stands at $28 billion, falling from $29.13 at the end of December, 2015. The naira has lost so much of its value in the last six months, raising calls for devaluation of the currency.

But the CBN has decided against devaluation. Rather, the bank is “fine-tuning the framework for foreign exchange management with a view to ensuring a more effective and liquid foreign exchange market…”.

“With time, you will see how we will provide the needed framework for a flexible forex regime,” Emefiele said.