CBN to increase official exchange rate of Dollar, as FX reserves go down

Nigeria’s forex reserves fell 2.7 per cent to $26.56 billion by May 20 from a month earlier, Central Bank of Nigeria data showed.
This was as analysts awaited a rate decision on Tuesday, which many believe could include a revamp of exchange rate policy.
There are indications that the official exchange rate will move to N250 to $1.
As at press time, the official exchange rate remained N197 to $1.
Analysts are expecting a rate hike to fight inflation and further support the naira, currently trading on the black market about 40 per cent below the official market level.
The bank could also introduce a new parallel exchange rate, analysts say, after the government’s move to use a lower N285 per dollar rate for petrol imports rather than the pegged official rate of N197.
A plunge in oil prices has eaten into the foreign reserves of Africa’s biggest economy, forcing the central bank to introduce currency controls, which has frustrated businesses and caused the economy to contract.
Nigeria’s dollar reserves were down 10.7 per cent from a year ago when they stood at $29.77 billion.