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The value of the Naira has continued to fall and has now hit N700 to $1 in the parallel market as the demand for the foreign currency persists.
As of last week, Naira was valued at N630 to $1 and has maintained a value of N620 to $1 before the further devaluation.
Abudul Hassan, who is a Lagos-based Bureaux De Change (BDC) operator said the devaluation of the naira to the dollar is a result of the demand for the dollar in the parallel market, so therefore the Central Bank of Nigeria (CBN) finds it difficult to meet the demand at the official market.
“Everybody is moving to the parallel market and we have seen rising pressure there. With little control from the regulator, people are quoting sale price at N710/$1 but actual transactions are settled around N700/$1. We expect the naira to continue its fall in the next few weeks as dollar liquidity in the system continues to nosedive,” he said.
Although actual transactions have maintained N700 per one dollar, news sources say black market dealers sell and buy around N700 to N710 per dollar.
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Managing Director of Cowry Asset Management Limited, Johnson Chukwu, says Nigeria has to revolutionize its Economy to export valuable goods to earn more dollars.
He says the country has to prioritise manufacturing and exportation of goods so it can revive the Naira.
Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, says “Nigerian consumers, businesses, and individuals alike are facing challenges and headwinds and are reeling in an atmosphere of hopelessness. This is because of a myriad of factors.”
“Notably, the precipitous fall of the naira in the forex market, the power supply shortage (national grid – 3,500MW), and now the almost unaffordable price of diesel (N850/liter). Despite the hike in interest rates, we are witnessing what some analysts fear may become a bout of runaway inflation. Inflation is not just domestic but global.”
The Central Bank of Nigeria (CBN) announced its strategy to revive its currency by raising $200 billion in earnings from non-oil yields within 3 to 5 years by convincing exporters to repatriate and then trade dollars into the local market as part of a rebate scheme.
The strategy of CBN is to revive the local currency against the dollar and its foreign counterpart.
Source: The Nation