Factual Pursuit of Truth for Progress
The Naira has exchanged with the dollar at N615 making it the lowest ever, following scarcity of the greenback, BusinessDay reports.
With the current rate Naira has lost 8.85 percent of its value since the beginning of the year when it exchanged at N565 with the dollar at the parallel market.
The traders said the dollar shortage worsened as demand from Nigerians traveling for pilgrimage increased.
In the Nigerian FX market, the parallel market rate worsened last week as the Naira depreciated by N2.00 to finish the week at N608/$1.00 despite marginal accretion to the foreign reserves in recent times. Similarly, the exchange rate at the Investors and Exporters (I&E) forex window fell by N0.08w/w to N421.33/$1.00, according to a report by Afrinvest Securities Limited.
“We do not foresee any positive triggers as the pass-through of pressure from Naira liquidity and tighter policy in advanced economies continues to depress the Naira,” analysts at Afrinvest said.
The Naira exchange rate on the first trading day in 2022 stood at N422/US$ on the I&E Window. It appreciated to N416.50/US$ as at 15th March 2022.
As of Thursday Naira appreciated by 0.08 percent as the dollar was quoted at N420.17 as against the last close of N420.50. Most currency dealers who participated in the foreign exchange market auction maintained bids between N412.00 and N444.00 per dollar.
Godwin Emefiele, governor of the CBN said in March 2022 that Naira has remained largely stable at the Investors and Exporters window, following the demand management policy of the Central Bank.
The World Bank said on June 14, 2022 that despite the recovery in exports and economic activity in 2021, the CBN’s FX supply in the I&E window declined by 41 percent in 2021 relative to 2020. At the same time, the Nigeria Autonomous Foreign Exchange (NAFEX) remained broadly stable in 2021, the parallel exchange rate depreciated by as much as 16 percent in a context of FX scarcity.
As a result, the premium between the parallel exchange rate and the NAFEX widened from 21 percent to 37 percent. The CBN has also signaled that it would stop selling FX to commercial banks by end-2022, and has introduced an FX repatriation rebate program in February.
On July 29, 2021, the CBN announced the immediate discontinuance of foreign currencies sales to Bureaux de Change (BDC) operators in Nigeria, and channeled the sales of foreign exchange for legitimate needs to the banks.
Nigerian banks had in May commenced a review of dollar request processing time for school fees, upkeep and rent payment, following dollar shortages.
This according to the banks was due to limited foreign exchange availability provided by the CBN.