The CBN has taken the N379/$1 exchange rate off its website.

Nigerian government had decided to use the NAFEX exchange rate as the official conversion rate for FAAC allocations
Central Bank of Nigeria (CBN), Governor Godwin Emefiele

The Central Bank of Nigeria has deleted the N379/$1 exchange rate from its webpage, in line with the bank's strategy of using the NAFEX rate as the default reference rate for official and legal transactions.

It has been withdrawn, and sources inside the Apex bank have also reported it has been removed.

After August 2020, when the Central Bank last changed the exchange rate, it has held the N379/$1 exchange rate on its website homepage, which previously reflected the official exchange rate. Historically, the exchange rate shown on the website has been referred to as the country's official exchange rate.

However, since 2021, all government transactions have been converted using the official NAFEX window's current exchange rate, confirming that the previous official exchange rate of N379/$1 is no longer valid.

The official exchange rate is NAFEX.

Nigeria has many exchange rate windows, including the I&E (NAFEX) window, which trades forex between exporters, investors, and buyers, the SMEIS window, which sells forex to importers, and the BDC window, which sells forex to retailers. Several requests have been made to the CBN, both domestically and internationally, to unify the various exchange rates.

However, sources inside the apex bank revealed that the NAFEX rate has always been the official exchange rate accepted for transactions between parties. They further argue that this is the pace at which the federal and state governments distribute monthly allocations.

Finance Minister Zainab Ahmed reportedly told journalists in March that the Nigerian government had decided to use the NAFEX exchange rate as the official conversion rate for FAAC allocations. Global news outlets, on the other hand, viewed the announcement as an admission that the government was moving toward a competitive exchange rate regime.

CBN Governor Godwin Emefiele, on the other hand, refuted suggestions of a flexible exchange rate, maintaining that Nigeria continues to use a controlled float. The arguments were debunked by Emefiele, who said that Nigeria still uses a Controlled Float exchange rate. He went on to say that the controlled float is a strategy that helps the CBN to keep an eye on business activity.

In March, Nigeria's Vice President, Yemi Osinbajo, told attendees at a Webinar hosted by the British foreign policy think tank Chatham House that the government uses the NAFEX rate, but this did not mean the currency had been floated.

“To the questions around whether we’re just going to float the currency, what the finance minister said is that payments for federal allocation will use the … market rate. The federal allocation account is the account where funds go, funds that are shared between the federal and the state governments. It is with respect to the federal allocation account that the minister of finance said that the … market rate will be used,” Osinbajo clarified.

Is the withdrawal of the currency a devaluation?

The naira has not been devalued or depreciated by the withdrawal of the now-defunct N379/$1 exchange rate from the website. It's just an administrative action by the managers of the central bank's website to reflect the fact that the economy, government, and all stakeholders have known for over nine months: Nigeria's official exchange rate points to the NAFEX.

Anyone doing business in Nigeria that involves foreign exchange would have to use the current NAFEX exchange rate as the official rate.

While this rate is market-determined, it is not fully market-determined or adjustable because the CBN intervenes on occasion, affecting the rate.

Nonetheless, this rate is the equivalent to a market-driven exchange rate (at least officially), and it is used for official trades by both the private and public sectors.

Despite the removal, Nigeria continues to run various exchange rate windows, with a significant difference between the parallel market and official prices. The central bank recently announced that its naira 4 dollar program, which allows Nigerians to collect diaspora remittances in dollars in addition to a N5 bonus per dollar sent, will be extended indefinitely.

The central bank is unlikely to devalue the currency as it does in the past. Although it appears to have a strong impact on the NAFEX window, the exchange rate in that window is unlikely to stay steady and may fluctuate regularly as demand and supply dictate.

Throughout 2021, the NAFEX average has risen from as low as N393/$1 to about N411/$1 (it was N410.25/$1 on December 31, 2020). On the 7th of May 2021, the exchange rate reached an all-time high intraday rate of N437/$1, indicating that certain people have transacted at that rate.