The Central Bank of Nigeria (CBN) strongly denied allegations on June 1 that it had devalued the national currency to N631 per dollar, labeling the report as containing “outright falsehoods and destabilizing innuendos.” Despite the CBN’s response, the Daily Trust, a Nigerian publication, stood by its story and called on the central bank to provide evidence to disprove its report.

CBN Dismisses Report as Containing ‘Destabilizing Innuendos’

Dismissing the report published in the Daily Trust as “fake news,” the Central Bank of Nigeria (CBN) rejected claims of devaluing the local currency to 630 per dollar. In a statement released shortly after the news of the supposed devaluation spread, the CBN emphasized that the report was riddled with false information and destabilizing implications. The CBN further criticized the authors of the report for displaying a “potentially willful ignorance” of the functioning of the Nigerian foreign exchange market.

In its statement, the CBN revealed that the exchange rate between the naira and the U.S. dollar at the Investors’ & Exporters’ (I&E) window on the morning of June 1, 2023, stood at N465 per dollar. Conversely, on the parallel market, dealers were reportedly offering as much as N740 for a single dollar. As previously reported by CryptokenTop.com News, the gap between the official market rate and the parallel market rate has progressively widened in recent years, with the parallel market rate at times almost double the I&E rate.

Several Nigerian and foreign economic experts have suggested that the current exchange rate set by the CBN overvalues the naira by approximately 20%. Notably, Tatonga Rusike, an economist at Bank of America, predicted that the CBN would eventually devalue the naira’s exchange rate against the dollar by around 20%.

Publication Affirms Story Based on Facts

Meanwhile, the Daily Trust, which initially reported the news that triggered the CBN’s vehement response, maintained its stance, asserting that the CBN had indeed sold U.S. dollars on the I&E market at a rate of N631 to USD1 on May 31. The report subtly hinted that the devaluation might have received approval from the newly inaugurated President, Bola Ahmed Tinubu. In his inauguration speech less than 48 hours earlier, Tinubu hinted at his administration’s intention to unify the multiple exchange rates of the naira.

Following the CBN’s terse statement, which also raised concerns about the professionalism of the publication, Daily Trust tweeted its unwavering support for the story. The publication contended that the story was based on three facts and one interpretation. One of these facts, according to Daily Trust, was that the CBN indeed sold dollars to banks on behalf of their customers at the stated rate of N631 to USD1 on May 31. Additionally, the publication mentioned President Tinubu’s call for naira exchange rate unification and his meeting with the CBN governor on May 30 as two other undisputed facts.

Alongside challenging the CBN’s accusation of spreading fake news, Daily Trust declared that it possessed evidence supporting its claims that the CBN employed a different exchange rate on the mentioned day. The publication insisted that the burden of proof lay with the CBN to present any contradicting facts.

We welcome your thoughts on this story. Please share your opinions in the comments section below.

FAQ about Nigerian Central Bank Devaluation Dispute

Q: What is the dispute between the Nigerian Central Bank and Daily Trust publication about?

A: The dispute revolves around a report claiming that the Nigerian Central Bank had devalued the local currency. The Central Bank denies the devaluation, while Daily Trust stands by its story and alleges the use of a different exchange rate.

Q: What does the Central Bank of Nigeria say about the report?

A: The Central Bank of Nigeria strongly refutes the report, calling it “fake news” and stating that it contains falsehoods and destabilizing innuendos. The bank also questions the authors’ understanding of the Nigerian foreign exchange market.

Q: What exchange rate does the Central Bank claim?

A: According to the Central Bank’s statement, the exchange rate between the naira and the U.S. dollar at the Investors’ & Exporters’ (I&E) window on June 1, 2023, was N465 per dollar. In contrast, the parallel market reportedly offered as much as N740 per dollar.

Q: Are there differing opinions on the naira’s value?

A: Yes, some Nigerian and foreign economic experts believe that the current exchange rate overvalues the naira by up to 20%. Speculations suggest that the Central Bank may eventually devalue the naira’s exchange rate by a similar percentage.

Q: What evidence does Daily Trust provide to support its claims?

A: Daily Trust asserts that it has evidence to back its claims that the Central Bank used a different exchange rate than officially stated. The publication argues that the onus is on the Central Bank to provide contradictory evidence.

Q: How has the exchange rate gap between official and parallel markets changed over time?

A: The gap between the official market rate and the parallel market rate has widened in recent years, with the parallel market rate at times nearly double the I&E rate. This trend has raised concerns about the effectiveness and stability of the foreign exchange system.

Q: What are the implications of this dispute?

A: The dispute has significant implications for the credibility of financial news and the transparency of the foreign exchange market in Nigeria. It highlights the need for accurate and reliable information regarding exchange rates and monetary policies.

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