Oil Price Fall: CBN Devalues Naira, Increases Interest Rate
Business News, Latest Headlines Tuesday, November 25th, 2014
Ayodele Afolabi, Abuja.
The Central Bank of Nigeria has devalued the naira and increase interest rate for the first time in three years following the dwindling oil prices in the international market.
The Apex Bank which made this known in Abuja on Tuesday said the rate was raised by 100 basis points to a record high 13 percent.
Governor of CBN, Godwin Emefiele told reporters in Abuja that the naira’s official peg was moved to a midpoint of 168-176 per dollar, from 155.
“The current challenge requires bold policy measures, moves on both the demand and supply sides of the foreign exchange market.
“The current downturn in oil prices is not transitory but appears to be permanent, being a product of technological advances,” Emefiele said.
The CBN Governor said that efforts to defend the Naira has led to dwindling foreign exchange reserve adding that a most flexible exchange rate is desirable.
The foreign reserve has fallen to $37.17 billion being the lowest in the last five months.
The CBN has been spending $27.9 million daily to defend the value of the naira against other competing currencies.
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