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Why naira is shedding value after initial appreciation, by experts

CURRENCY SCARCITY: CBN begins disbursement of lower denomination Naira notes

The loss of 1.5 per cent by the Nigerian local currency, the naira over dollar, a week after constant appreciation over foreign currencies, especially, the dollar has been identified.

Operators on the parallel market woke up on Friday to witness N465 exchange per dollar, compared with N452, N455 and N458 in the three subsisting trading period.

The Central Bank of Nigeria (CBN) reportedly pumped in about $500 million within three weeks of persistent intervention in the foreign exchange market, mainly the interbank.

But President of Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, attributed the reason for the slide of the naira to commercial banks’ discrimination in selling dollars to some customers.

“Contrary to CBN directive, the banks have refused to sell dollars, unconditionally, to the needful customers with savings accounts. This has made those so deprived go extra miles in sourcing hard currency at any cost for their needs,” Gwadabe, said.

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Mr. Clement Kujofun, a financial analysts, said the current interference of CBN in the exchange market should be appreciated for its short term solution, adding that lasting solution will come when Nigeria’s foreign direct investment (FDI) resumes its status before Nigeria slipped into recession.

“There is still the need for policy makers to do whatever is possible to lure foreign investors back to Nigeria, or else CBN will soon discover that the manufacturing sector is not yet covered by the present policy.

“The reason naira will be shedding more weight is that Nigeria is in recession.”

Trading at the interbank market saw the Naira sold at N305.25 to a dollar

Others, who offered comments on the issue called on Travelex and commercial banks to take the operators of BDCs into confidence if the naira is tosustain its initial rise in value since February 2017.

 

 

 

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