Nigerian currency hits record low after vice-president slates central bank

ABUJA - The Nigerian naira weakened to a record low after the country’s vice president criticised the central bank’s exchange-rate policy and called for a rethink.

The official rate at which the central bank sells dollars to investors and exporters, depreciated by 0.19 percent to 415.10 to the dollar on Wednesday compared with the Tuesday close of 414.30 naira, according to an emailed note by FSDH Securities. "Most participants maintained bids between 405 naira and 420.15 naira per dollar," FSDH Securities said.

The current approach to managing the currency favours those able to obtain dollars at the official rate of 410 naira, because they can then sell the foreign currency on the parallel market at 570 naira, Vice President Yemi Osinbajo said in an emailed statement.

The "massive difference discourages doing proper business, when selling the dollar can bring in about 40 percent profit," Osinbajo said.

The vice-president’s position sets him on a collision course with the central bank, which maintains tight control of the naira by keeping it within a preferred range. The currency has been devalued three times since March 2020.

Osinbajo’s stance contrasts with that of his boss, President Muhammadu Buhari, who last year  ordered  the bank not to supply foreign currency to importers of food and fertiliser to conserve dollar reserves and boost local production.

Buhari has also previously warned against devaluing the currency because of the impact it could have on the cost of living in Africa’s most-populous country. Under current policy, only authorised lenders are allowed to sell dollars to end-users at central bank-controlled rates.