- Forex Stability Excites Buhari, Says CBN Gov
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, on Thursday said President Muhammadu Buhari was excited at the current stability being witnessed in the foreign exchange market.
Emefiele told State House correspondents that Buhari was delighted to learn about the stability when he (the CBN governor) briefed the President of the activities of the apex bank in his office at the Presidential Villa, Abuja.
He told the reporters that the parallel market is currently stabilising at between N380 and N385 against $1.
He said, “Basically as it is expected, what we normally do is from time to time to brief the President about activities of the Central Bank of Nigeria particularly at this time as it relates to the efforts that the Central Bank is making to stabilise the forex market
“We briefed him regarding the activities so far and he was very delighted to hear that the market is stabilising at the level that it is right now and I am saying the parallel market currently stabilises at between N380 and N385.”
He attributed the stability in the forex market to the increase in oil production which had, according to him, also led to increase in export of the commodity.
Emefiele also said crude oil prices that had been hovering between $50 and $56 per barrel had helped to boost the nation’s revenue.
He said the prices had also helped the apex bank to defend the currency.
“Given what we have right now the fact that the revenues are looking good, the state of the economy is good and I believe that we are going to pull out of the problem in due course,” he assured Nigerians.
He also promised that the bank would continue to make the foreign exchange available to those in need to enable them to import or carry out legitimate transactions.
Bureaux De Change Association Warns Against Hoarding of US Dollar, Says Speculators will Lose
The Association of Bureaux De Change Operators of Nigeria (ABCON) on Sunday warned currency speculators and hoarders of impending losses if they do not desist from creating bogus foreign exchange rates for personal gain.
In a statement titled, “ABCON warns speculators will lose money as CBN has enough reserves to fund market, defend naira”, the association said speculators and hoarders are taking a huge risk as the Central Bank of Nigeria has enough liquidity to defend the Naira and maintain stability against global foreign counterparts.
This is coming few days after the local currency plunged to N484 to a United States dollar and N620 against the British Pound at the black market due to the rising demand and persistent scarcity that most hoarders interpreted as lack of financial muscle on the part of the central bank, especially if the nation’s falling foreign reserves is factored in.
However, ABCON said with about $36 billion foreign reserves, the Central Bank of Nigeria has the necessary means to punish speculators and hoarders they described as enemies of the nation.
President of ABCON, Alhaji Aminu Gwadabe, explained that the central bank is working to unify the nation’s foreign exchange rates and eliminate past challenges that have made market determined forex rates almost impossible.
He said “I think that the CBN by pushing the official foreign exchange rate from N306 to N379 to the dollar is in line with market demand.
“It has also helped to narrow the official-parallel market rates gap that formed the basis of ridiculous speculations among unpatriotic forex dealers and spectators.”
Gwadabe, however, advised the Federal Government to improve security surveillance at the nation’s land borders to checkmate illegal foreign currency cash deals.
He also asked the central bank to raise liquidity ratio of bureau de change operators to discourage dollar holdings.
Forex Scarcity Plunges Naira to N620 Against British Pound
Naira Exchanges at N620 to a British Pound at Black Market
Lingering foreign exchange scarcity has plunged the Nigerian Naira to a record-low of N620 against the British Pound at the black market.
The declined by a record N14 from the N607 it exchanged to a single British Pound on Thursday to N620 on Friday, signaling rising demand for forex amid persistent scarcity.
Experts have attributed the surge in demand to the usual push for the end of the year sales by importers and businesses looking to close the sales gap created by the COVID-19 lockdown.
The local currency plunged against global counterparts by the most in recent months on Friday. The Naira declined by N13 against the European common currency to exchange at N570.
Similarly, the Naira lost another N4 against the United States dollar to exchanged at N484, further down from N480 it was sold on Thursday.
Experts are predicting further decline for the Nigerian Naira, largely due to the weak macro fundamentals, overexposure to crude oil uncertainty and US Dollar.
US Dollar Gains Against the Nigerian Naira to US$/N480
The United States Dollar continues its bullish run against the Nigerian Naira on the black market on Friday.
The American Dollar gained N5 against the Nigerian Naira to exchange at US$1 to N480 across key black markets in Nigeria.
The US Dollar has been on a bullish run since COVID-19 pandemic plunged oil prices and distrupted Nigeria’s foreign revenue generation at a time global supply chains were grounded and economies shut to curb the spread of ravaging COVID-19.
The Central Bank of Nigeria devalued the Naira twice to accommodate the nation’s new reality and ease pressure on the weak foreign reserves, still rising capital flight among foreign investors looking to exit the economy and weak foreign direct investment impedes the apex bank’s ability to service the economy with enough US dollar.
Therefore, persistent scarcity due CBN’s failure to supply enough liqudity in an economy that depends on import for almost 90 percent of its consumption plunged the Naira value in recent months.
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