Bitcoin News and Finance
After Central Bank Devalues Naira by 5% Finance Minister Attributes Drop to ‘Market Forces’ Skip to main content

After Central Bank Devalues Naira by 5% Finance Minister Attributes Drop to ‘Market Forces’

Nigerian Finance Minister Zainab Ahmed has denied widespread reports that the Central Bank of Nigeria (CBN) had sanctioned the devaluation of the local currency sometime in May 2021. Instead, she attributes the naira’s fall to the “volatility in the oil price.” Ahmed’s remarks come just a few weeks after the official naira exchange rate dropped from $381 to the dollar to the current rate of 411:USD1.

Devaluation vs Depreciation

As previously reported by Bitcoin.com News, the CBN had initially allowed the naira’s exchange rate to drop to 419.5 per U.S. dollar. However, since May 14, 2021, the naira’s exchange rate against the dollar has remained at or just below 411. It is this apparent adjustment of the exchange rate by the CBN (which meets Investopedia’s definition of devaluation) that prompted reports that the naira has been devalued.

However, in her explanation, Finance Minister Zainab Ahmed still refuses to equate the CBN’s tinkering with the exchange rate to devaluation. She said:

Let me not use the word devaluation. (The) naira is responding to market forces of demand and supply. We have oil and gas, unfortunately, still the major source of foreign exchange.

According to a report, oil contributes less than 15% to Nigeria’s Gross Domestic Product (GDP) yet it brings in “at least 70-85 per cent of revenue and 80-90 per cent of foreign exchange in Africa’s biggest oil producer.” In order to remedy this, Ahmed says Nigeria is now focused on finding and developing alternative sources of foreign exchange.

Unifying the Naira’s Multiple Exchange Rates

In the meantime, as the CBN and Nigerian government attempt to unify the naira’s multiple exchange rates, the currency continues to weaken on the parallel market. For instance, at the time of writing, naira’s sell rate had depreciated to 502 against the dollar from the 493 that had been reported in late May. Before the devaluation, the naira’s black market rate had stabilized around 485.

However, following the CBN’s exchange rate adjustment, the gap between the official and parallel market exchange rates has grown. This growth, in turn, raises fresh doubts about the central bank’s ability to unify the naira’s multiple exchange rates.

Do you think it’s possible for the CBN to unify the naira’s official and parallel market exchange rates? Tell us what you think in the comments section below.

Labels:

Comments

Post a Comment

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl...
Post a Comment
Read more

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju...
Post a Comment
Read more

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and...
Post a Comment
Read more

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r...
Post a Comment
Read more
Blogarama - Blog Directory