Nigeria’s currency, the Naira may reach N700 per dollar by the end of the week as demand for the U.S currency by Nigerians is rising uncontrollably, one currency trader told BusinessDay, Monday.
At the close of trading on Monday, the Naira closed at N665 per dollar, which represents a 1.65 percent drop compared to N654/$ closed on Friday at the unofficial parallel market (black market).
According to the BusinessDay report, the trader said a lot of people are buying and keeping the dollars for future use, especially those whose children are schooling abroad.
The Nigerian local currency has been depreciating at the parallel market following scarcity of foreign exchange at the official market, amid rising external reserves.
Data from the Central Bank of Nigeria (CBN) showed that the country’s external reserves increased from $38.60 billion recorded in May 2022 to $39.44 billion as of July 18, 2022, an increase of 2.17 percent.
The Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf 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.
Johnson Chukwu, managing director/CEO Cowry Asset Management Limited, while speaking on the FX situation said, “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 is negative. Nigeria is currently importing more than it is exporting.”
At the official Investors and Exporters (I&E) forex market, the naira appreciated by 0.66 percent as the dollar was quoted at N427.17 on Monday as against N430.00 it closed on Friday. Most currency dealers who participated in the last foreign exchange auction maintained bids between N406.90 and N444.00 per dollar.
Data from the FMDQ showed that daily foreign exchange market turnover increased by 146.20 percent on Monday to $89.79 million compared to $36.47 million recorded on Friday, .
Last Tuesday, Godwin Emefiele, governor of the CBN warned bank customers against converting the naira to foreign exchange, for electioneering purposes.
The CBN governor issued this warning at the post-Monetary Policy Committee (MPC) meeting briefing.