Naira, Nigeria’s currency may reach N700 per dollar by the end of the week as demand for the greenback by Nigerians is rising uncontrollably, one trader told BusinessDay, Monday.
After trading on Monday, naira closed at N665 per dollar, which represents a 1.65 percent drop compared to N654/$ closed on Friday at the parallel market popularly called black market.
The trader said a lot of people are buying and keeping the dollars for future use, especially those whose children are schooling abroad.
Naira has been depreciating at the parallel market following shortage in foreign exchange supply at the official market, amid rising external reserves.
Nigeria’s external reserves increased by 2.17 percent to $39.44 billion as of July 18, 2022, from $38.60 billion recorded in May 2022, data from the CBN showed.
Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) had at last Tuesday’s post-Monetary Policy Committee (MPC) meeting briefing, warned bank customers against converting the naira to foreign exchange, for electioneering purposes.
The CBN also frowned at the conduct of unauthorized movement of funds within and outside the country and would use tools at its disposal to check the movement of illicit funds.
Muda Yusuf is the Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE) said the FX scarcity is becoming more severe than before and this has increased the reliance of manufacturers on the parallel market, which is limiting their productivity and putting them under pressure.
At the official market known as Investors and Exporters (I&E) forex window, naira appreciated by 0.66 percent as the dollar was quoted at N427.17 on Monday as against the last close of N430.00 on Friday. Most currency dealers who participated at the last foreign exchange auction maintained bids between N406.90 and N444.00 per dollar.
The daily foreign exchange market turnover increased by 146.20 percent on Monday to $89.79 million compared to $36.47 million recorded on Friday, data from the FMDQ indicated.
Meanwhile, the persistent depreciation of the Naira is seen as not having an immediate solution after all the foerign exchange measures introduced by the monetary authority to stem the tide, according to Nigerian analysts.
“I don’t think there are things anybody can do in the immediate to stop the Naira depreciation because our balance of trade and balance of payment are negative. Nigeria is currently importing more than it is exporting”, said Johnson Chukwu, managing director/CEO Cowry Asset Management Limited.