New petrol price pushes naira to 360 against USD

BDCs to get $50, 000 weekly as CBN increases sales benchmark

The decision of the Federal Government to increase the pump price of Petrol from N86. 50 to N145 has continued to have rippling effect on the naira, as the currency traded N360 to United States dollar on Friday.

The recent slide in the value of the naira is said to be as a result of a rise in demand for dollars by fuel importers.

The currency stood at 341 at the unofficial market on Thursday, just a day after the Federal Government announced the removal of fuel subsidy and a new petrol price band of N135 to N145 per litre.

The government, while announcing the new policy, said fuel importers were allowed from now on to get dollars from the parallel market to help ease acute shortages that likely result from increase in demand for dollars, and more pressure on the naira, as importers increased their orders.

Read also: Petrol price increase is about forex, not subsidy removal -Osinbajo

Financial experts and forex traders however said the drop in the naira value is due to demand pressure from buyers, speculation and hoarding.

On the role of speculators, the President, Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadabe, said: “More speculators are taking a position in the market, causing dollar scarcity and fall in the value of the naira. There is the need for intervention from the Central Bank of Nigeria. If not, the speculation will continue and the currency may fall to 380.”

Also reacting to development, the Head of Investment Research, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, opined that if the CBN failed to take an immediate action by adjusting the naira, the pressure on the naira would be very significant.

He said: “I think the knee-jerk reaction being witnessed in the parallel market can be linked to new development within the oil space that now allows oil importers to buy foreign currency from the parallel market.”

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