Naira Declines Across the Board Despite New Forex Policy

Efforts of the Central Bank of Nigeria to stimulate productivity and checkmate the activities of speculators and hoarders at the parallel market, popularly known as the Black market, through diaspora remittance is yet to reflect on Naira value as the local currency plunged back to record lows against global counterparts at the nation’s black market.

The Naira plunged to N483 against the United States Dollar on Tuesday morning at the black market, down by N13 from the N470/US$ recorded on Thursday.

This depreciation continues against the British pound and the Euro as the Naira remained under pressure at N615 to a Pound and N570 to European common currency, Euro.

Despite the Central Bank of Nigeria adjusting forex policy to ensure that recipients of diaspora inflows can now receive their funds in foreign currency (United States Dollar) or have it transferred to their ordinary domiciliary account where they also have options to withdraw in cash or transfer, the Naira failed to sustain earlier gains as banks and the International Money Transfer Operators (IMTOs) are either yet to update their systems in line with the new forex policy or struggling with dollar payment due to scarcity.

The CBN had planned to flood the foreign exchange market with an estimated $2 billion per month or $24 billion worth of diaspora remittance per year to ease forex scarcity, fast track economic recovery and cushion the economy. However, with remittance inflows yet to crystalise across the forex market, scarcity remains both at the Bureau De Exchange and parallel market sections of the forex. The Naira slid back to a record low against global counterparts on Tuesday.

At Investors King, the Naira is projected to moderate from the current record low in the first half of the year if diaspora remittance per month consistently hit $2 billion or close to that amount as anticipated by the Central Bank of Nigeria.

But with COVID-19 and other economic issues ravaging the world yet to fully subside, it may take strong COVID-19 vaccine results, the full reopening of economies and the rise in new job creation in key countries like the United States, the United Kingdom, Australia and other top migrant continents like Europe and Asia for CBN to achieve its aims of stabilising the Naira with diaspora inflows.