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Only policy change can explain N169.4 depreciation, Daily Trust replies CBN

The management of Media Trust Group, publishers of Daily Trust titles, on Thursday said only a policy change by the government through the Central Bank…

The management of Media Trust Group, publishers of Daily Trust titles, on Thursday said only a policy change by the government through the Central Bank of Nigeria (CBN) could reasonably explain the wide difference of N169.4 between the official window and foreign exchange window in just a single day.

It noted that only the CBN has the power to do that overnight regardless of what name it is called.

Daily Trust had reported exclusively that on Wednesday, the CBN sold dollars to bidders at the Importers and Exporters (I&E) window at the rate of N631 per $1.

In a widely-circulated response, the CBN alleged that the report was “replete with outright falsehoods and destabilising innuendos.”

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But Daily Trust, in a statement on Thursday, said it stood by the facts of the story.

The statement read: “The story contains three facts and one interpretation: that the CBN sold dollars to banks on behalf of their customers at the said rate on the said window on the 31st; that President Bola Ahmed Tinubu had spoken of his government’s resolve to unify Nigeria’s exchange rate markets; and he met with CBN Governor Godwin Emefiele on assumption of office Tuesday. All of these are facts and we stand by them.

“From the foregoing, therefore, we wish to reiterate that we stand by the facts of our story. We have evidence of those who bought the dollar at the reported rate, and we challenge the CBN to provide any facts to the contrary.

“We wish to reiterate that we are not a fake news platform, as the CBN knows only too well. Some of the best and most impactful public interest journalism in Nigeria of the past 25 years has been done by us.”

Daily Trust also spoke to an importer who bought dollars from one of the new generation banks. The bank told him it was available at N631 from the CBN and obliged them. His bid had been there for more than three months.

He said, “Yesterday (Wednesday) was the first time CBN sold it to me at amount above the N460 something that has been the normal official rate. I have been bidding and establishing LCs through multiple banks for years.”

Another source said he got over $100,000 from the CBN at 631/$.

“It was very easy for us to get the dollars unlike in the past,” he said.

A senior official of one of the old generation banks confided in our reporter that they bought the US dollar at N631 from the CBN  for one of their customers.

Speaking on the development, a financial market analyst, who preferred anonymity, said: “I know Central Bank sells dollars to companies at the Secondary Market Intervention Sales (SMIS) auctions at up to N600 a dollar. Maybe (I’m not sure) it’s what your source wanted to refer to, not I&E.

“Most trades happen at the I&E window. It’s the rate there that government does its transactions and foreign investors also use it to bring in inflows, so that’s where devaluation happens. However, traders use what happens at other windows where the central bank intervenes such as the SMIS to predict what can happen at I&E.

“If it’s with respect to the I&E window, what happens is that banks and other dealers with dollars or want to buy dollars make offers and bids to one another on a trading day.

“It means they buy and sell to each other at different prices – based on an agreement between a willing buyer and a willing seller. If you check the thread, you can see the highest and lowest prices the trades were executed. That is the high and low. At the end, there’s an average price for the different deals. That’s what’s quoted as the rate that time or day.”


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