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Despite CBN Efforts, Naira Falls Again At Parallel Market
……Closes 900/$ At Official Window
Yinka Olajoyetan, Lagos
The Naira fell to N1,400/$ at the parallel market on Thursday despite recent efforts by the Central Bank of Nigeria to save the national currency.
Speaking with Kadecommunicationng, a Bureau de Change Operator at the Lagos airport, Mohammed Audu said, “As at today, one dollar is N1,400. I bought at N1,390 to a dollar.”.”
According to the BDC operators, there is currently uncertainty as regards the price of the Naira against the dollar due to high demand.
On the official Investor and Exporter window, the Naira depreciated by 2.12 per cent to N900.96/$ from the N882.24/$ it closed on Wednesday. Transactions opened at N929.18/$, rose to a high of N1,399/$, and recorded a low of N789/$. Total FX turnover was $115.19m, a 103.52 per cent increase from the $56.60m that was recorded on Wednesday.
The Naira’s fall has persisted despite the best efforts of the CBN to save it, piling more pressure on the economy and the average Nigerian.
Recently, the apex bank announced it has paid $2bn as part of FX backlogs, also the Federal Government through the Nigerian National Petroleum Company Limited got a $2.25bn oil-for-cash loan facility from the African Export-Import Bank to boost FX liquidity.
All these are yet to be reflected in the market. Commenting on the exchange rate recently, the CBN’s Governor, Olayemi Cardoso, stated that there was an expectation that the foreign exchange market would stabilise in 2024.
He hinged this expectation on the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the apex bank.
He also said the Naira was currently undervalued.
Announcing other moves by the bank at the launch of the Nigerian Economic Summit Group 2024 Macroeconomic Outlook Report, the governor said, “I am pleased to note our collaboration with the Ministry of Finance and the NNPCL to ensure that all FX inflows are returned to the Central Bank.
“This coordinated effort will greatly enhance the bank’s FX flows and contribute to the accretion of reserves.” He added that the bank is implementing a comprehensive strategy to improve liquidity in the FX markets. Cardoso expressed the belief that the national currency is currently undervalued and, “coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term.”