Naira weakens despite CBN’s interventions in Forex market

Isola Moses | ConsumerConnect

Despite the interventions of the Central Bank of Nigeria (CBN) to the ease off Foreign Exchange (Forex) market challenges in the country, Naira has lost all ground it gained after the regulator started weekly interventions, indicating the continuous demand for the greenback.

Nigeria’s Naira is reported to have fallen to its weakest level in six weeks in informal trading as central bank interventions in the official window failed to meet demand, according to agency report.

It was learnt the local unit changed hands for 470 per Dollar Friday, November 13, the lowest since September 29, according to abokifx.com, a Web site that collates street rates in Lagos.

The Naira closed at 382.10 per Dollar on the spot market, where the Central Bank of Nigeria sells limited amounts of the US currency to importers.

The Nigerian currency, according to report, has lost all ground it gained after the banking regulator started weekly interventions, signalling the continuous existence of pent-up demand for the greenback.

It is recalled the CBN resumed sales to licensed Bureau De Change (BDC) operators September 2020, after the country opened up international travel following the lifting of COVID-19 restrictions.

Julius Tayo-Olufemi, Chief Executive Officer of Cephas Grace International Limited, which imports home appliances into the country, was quoted to have said that the money available in the official window is insufficient to meet current demand.

Tayo-Olufemi stated: “On a monthly basis, I need about $100,000 to $150,000 and the maximum I can get at the controlled price is $20,000. So, I have to sort out the remaining balance myself.”

Omotola Abimbola, an analyst at Chapel Hill Denham, said the yearly Christmas season import bill pressure, which usually starts late November and disappears in January, may be coming early.

He stated that the regulator has always increased intervention sales to money changers, but “they are a bit hampered this time around.”

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