Naira may be heading for an all time high of 500 Naira to a dollar by year end as all effort by the regulatory authority to meet up with the demands of importers and foreign remittance is unable to safe the Naira.
The CBN had on Monday asked banks to submit bids for a “special currency auction” to clear the backlog of matured outstanding dollar obligations for selected sectors of the economy, which include airlines, fuel importers and manufacturing firms.
CBN sold “funded forwards of two to five months tenor dollars to the targeted sectors at an auction this week and required them to pay for the dollar sale on Friday”. Analyst said
This effort of the Apex bank to clear the backlog of matured obligation is still not enough to ensure all request are met as most request are still being funded from parallel market.
“The naira is seen depreciating further and may hit the 500 mark to the United States dollar at the parallel market next week as the greenback scarcity persists and the Central Bank of Nigeria cuts supply to foreign exchange operators”. Punch Newspaper
Within last week and now the Naira has depreciated by 10 Naira to a dollar trading at 485 and now 495 Naira to a dollar. While it is quoted at 310.5 Naira in the official interbank window.
The acute shortage of dollars in the parallel market may not be unconnected with the slashing by half of dollar sales by the International Money Transfer Operators popularly known as IMTO to BDC. The sales to over 1,400 BDC from the IMTO was slashed from 15,000 USD to now 8,000 USD per week.
The acute shortage of the dollar in Nigeria is as a result of the global crash in the prices of crude oil and the persistent bombing of oil pipelines in the Niger Delta region of the country which has adversely affected the volume of crude oil lifted for sales. Crude oil been the main forex earner for Nigeria and forex shortage has brought untold hardships on Nigerians.
Several companies to halt operations and lay off workers, compounding the already exacerbated economic crisis.
The CBN has consistently struggled to support the Naira as the country’s external reserves continue to fall.
Experts advises that unless the issue of supply of forex is addressed and sorted out the economic challenges might continue and may hit harder during this festive period.
