Naira Weakens To N478 Despite CBN’s Forex Interventions

The naira has dropped to its worst level since August as the Central Bank of Nigeria’s intervention failed to meet dollar demands.

The Naira at the informal market fell 1.7 per cent to N478 per dollar on Wednesday, against the N470 per dollar recorded on the close of trade on Friday, according data obtained from AbokiFX.

The naira had on Monday slumped to N475, from the N470 recorded on Friday.

The persistent pressure on the naira was due to low foreign exchange resulting from fall in crude prices.

Data from FMDQ Holdings at the close of trading on Tuesday showed that total forex supply to the investor window from January till November this year was $15.8bn compared with the $30bn recorded during the same period in 2019.

Nigeria’s Central Bank had resumed sale of dollars across markets and the various Bureau De Change but foreign exchange backlogs have worsened demand for forex.

The apex bank had introduced policies limiting access to foreign exchange such as barring firms from using third parties and agents to import goods into the country.

“I don’t see dollar demand moderating. It has nothing to do with imports. Naira is not storing value hence the shift,” a financial analyst, Kalu Aja told THE WHISTLER.

Chimdi Kalu, a Lagos based business man said, “Banks will not sell to us easily except strictly on travels or you have connections inside.”

He added that Bureau de Change operators “will manage to source a certain amount, if you can afford the cost.”

Experts said this is an evidence of the depth of dollar shortage faced by Nigerian importers.

The CBN following demand pressure has also been forced to ration dollar to safeguard Nigeria’s foreign exchange reserves.