Naira, yesterday, suffered its most steep depreciation in the inter-bank market since the new foreign exchange market commenced, trading at N365.25 per dollar against N314.14, almost by 14 percent difference.
Parallel market rate hovered around N395/ USD1, indicating that the huge gap is now narrowing. The steepest single day depreciation before yesterday was recorded shortly after the dropping of Central Bank of Nigeria’s remote rate control which spiked the exchange rate from N281.8 to about N305.5 last month, just 8.4 percent depreciation.
Earlier this month also, another sharp depreciation was recorded when the rate hit N332.1/$1 from N315.4/ $1, which translated to just about 5.02 percent depreciation.
Traders attributed yesterday’s development to a sustained discomfort with continued scarcity of foreign exchange supply from independent sources, a situation which had forced the apex bank to continue its intervention almost on a daily basis since this month. The development is coming against the backdrop of continued pressure on external reserves which has steadily declined by 2.11 per cent since last month, hitting $25.8 billion mid this week, while traders and foreign investors have expressed fears that the depletion was piling pressure on the exchange rate.
The apex bank had in June, rolled out the new foreign exchange market policy in a bid to liberalise transactions and increase independent supply of forex to the inter-bank market. CBN had hoped that foreign investors and other independent holders of foreign currencies would respond by bringing their resources to the market. But this did not happen because the prospective suppliers believed the market then was still controlled by the apex bank which kept rates between N280 and N285 per dollar.
A further liberalization one month later still could not attract the suppliers significantly as additional fears of reserve positions hampered positive sentiments. The adverse trend in the external reserves have been blamed partly on both fiscal policy weaknesses and disruptions in the oil sector arising from militancy in the Niger Delta. At the backdrop of the fiscal policy weaknesses, President Mohammadu Buhari, said yesterday that Nigeria will need to balance monetary and fiscal policies in order to overcome its worst economic crisis in decades and return to growth.
He did not say what the government intends to do but he pointed out that the CBN was helping the economy with some specific intervention programmes but the country needed to balance monetary and fiscal policies.
Buhari who was speaking while addressing a meeting of African central bank governors in Abuja, said “We fully understand that monetary policy alone is not sufficient to bring about desired economic growth”. Click to signup for FREE news updates, latest information and hottest gists everyday
Advertise on NigerianEye.com to reach thousands of our daily users
Change dole! Naira is now equal to 1 dollar.sai Baba! Baba for 2019!
ReplyDeleteChange dole! Naira is now equal to 1 dollar.sai Baba! Baba for 2019!
ReplyDeleteDoes it mean Nigeria can not survive without oil. I think the APC as it presently constituted lacks the requisite qualities to change things. Had it been that Nigeria is a nation, calls for this government to resign would have been echoing from all conners of Nigeria
ReplyDeleteNo Forex for inter-bank but in the hands of BDC alhajis. CBN governor, finance minister and the Buhari led govt should stand up and educate the Nigerian community on the way forward. All of them have their children schooling abroad, are they also facing these untold hardship this govt had imposed on the common masses? I cannot pay my project fee as to complete my project. Everyday is that the bank is sourcing for Forex and has not found. But CBN is busy sell Dollars to BDC Alhajis out there. CBN introduced inter-bank Forex transaction over a mount ago as to ease the difficulties but it is not working as the govt has bent to support their brothers in Bureau De change business. Very weak policy.
ReplyDeleteHow will this govt claim that they support education in totality when everything concerning education stings their ears more especially when it does not concern their children.
To survive in Nigeria today is just God's favour and grace. Mr. PMB still saying that Nigerians will soon outgrown poverty and suffering APC govt has plunged us to. Before 2015 May 29th the population of Nigeria was estimated to 180 million, my fear is that the population may drastically reduced to 1/2 by the end of this govt in 2019 due to starvation, sickness, hardship, poor govt policies supported by having round pegs in square holes.
Mr.PMB, know it that Nigeria is for Nigerians and not for you and your cohort APC. The masses are dying in their numbers everyday and your thoughts are not in that direction. Nigerians may decide to pray a revise prayer and the Almighty God will answer their prayer and the unexpected will take place in the country. "Be yee warned".