- Naira Appreciates as Manufacturers Lament Forex Scarcity
The Nigerian Naira appreciated against the US dollar on the parallel market on Monday, even as the report of manufacturers sourcing for forex at the black market hit the news.
The Naira gained N2 to trade at N468 to the US dollar, from the N470 it traded on Friday. While the Pound Sterling and the Euro were exchanged at N565 and N510 respectively.
However, the local currency declined on the interbank market window, dropping N4.31 against the US dollar to close at N308.81 from Friday’s N304.50.
At the Bureau De Change segment, the Naira closed at N385 to the greenback, while both the Pound Sterling and the Euro traded at N564 and N504, respectively.
Some manufacturers have warned that customers may have to pay about 100 percent more than they are currently paying for locally manufactured products, as they lamented their inability to access forex at what they considered moderate rate for a period ranging from six months to one year.
Chantel Abdul, the Managing Director of Mojec Metering said “Your production suffers and you do not have products to sell to your customers, while you wait endlessly like this.”
Others, have blamed the situation on commercial banks’ reluctance to yield to CBN’s directive of selling 60 percent of forex supply in the system to the manufacturing sector.
Experts at Investors King limited have said “There is a very limited forex supply to meet both the bank customers’ demands and manufacturers usual end of the year surge in demands, banks simply do not have enough liquidity to meet those demands.”
But analysts have expressed optimism that the currency would appreciate as market liquidity increases.
“The issue of liquidity should be addressed, once OPEC members reach a consensus on production cut this November,” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd.