The federation account allocation committee (FAAC) says it has adopted the N436.38/$1 exchange rate for the month of June remittances, The Cable reports.
The development is contained in the monthly presentation of the Nigerian National Petroleum Company (NNPC) Limited to the FAAC meeting on June 22.
The committee had said it shared the sum of N786.161 billion to the federal and state governments as well as local government areas (LGAs) in May – up from N655.93 billion in April.
The committee will use its new exchange rate, “as advised by the Central Bank of Nigeria”, for June’s remittances, according to the report.
The development comes despite the country’s floating exchange rate – allowing supply and demand in the FX market to determine the value of the naira – which was implemented on June 14.
The apex bank, complying with the federal government’s directive, had announced the unification of all segments of the forex exchange (FX) market, signalling the end of its control of the foreign exchange market.
Since then, the exchange rate of the local currency has been determined by market forces.
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Typically, devaluation should lead to an increase in revenue allocation to the three tiers of government from the federation account. However, lesser allocation is expected if FAAC’s newly adopted exchange rate is used.
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