Naira falls to N622 as dollar scarcity persist at official market

Naira, Nigeria’s currency on Monday depreciated to N622 per dollar at the parallel market popularly called black market, as scarcity of the greenback persisted at the official market, traders said.

The naira depreciation followed the demand pressure from end users who could not purchase dollars from the banks due to shortages.

Nigerian economists/analysts have said there are no immediate solutions to naira depreciation after all the foreign exchange measures introduced by the monetary authority to stem the tide.

Read also: No immediate solution to naira depreciation – analysts

However, the Central Bank of Nigeria (CBN) is expected to address the foreign exchange challenges at its ongoing Monetary Policy Committee (MPC) meeting in its Lagos office.

“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 during Nairametrics economic outlook Webinar.

He said in the long run, Nigeria must be a producing economy or manufacturing hub, producing quality products for exports.

Taiwo Oyedele, head of tax and corporate advisory services at PwC, explained that the 43 items prohibited from accessing foreign exchange can be imported but cannot access foreign exchange.

But he was concerned that the items that are not prohibited from accessing forex get 30 percent from the official market while 70 percent is sourced from the black market.

At the Investors and Exporters (I&E) forex window, Naira appreciated by 0.28 percent as the dollar was quoted at N429.13 as against the last close of N430.33, data from the FMDQ stated.

Most currency dealers who participated at the foreign exchange auction on Monday maintained bids between N414.00 (low) N444.00 (high) per dollar.

The daily foreign exchange turnover increased marginally, by 8.67 percent to $95.58 million on Monday from $87.95 million on Friday, according to the data.

At the money market, the Overnight (O/N) rate remained unchanged at 14.00 percent, while the Open Repo (OPR) increased by 0.17 percent to close at 14.00 percent as against the last close of 13.83 percent.