justicejay:
The sharp and steady depreciation of the Naira
at the inter-bank foreign exchange market in the
last one week has forced the Central Bank of
Nigeria, CBN, to intervene yesterday to stem the
slide.
The
apex bank was said to have offered about
USD5.0 million each to dealers amidst scarcity of
foreign currency which had persisted since last
week Friday following the sudden withdrawal of
CBN’s interventionist resources.
Dealers said the supply from the apex bank
saved the Naira from crashing to N350/ USD1
yesterday as the rate was already gone beyond
N330 as at mid day before the apex bank’s
intervention which relieved the pressure and
forced the rate down to less than N310.
But the intervention could not save the Naira
from further depreciation at the parallel market
segment where it traded for N380/ USD as
against N375 it closed on Thursday, a
development which the dealers said was
connected to a perceived pressure on external
reserves and CBN’s capacity to continue to be
the only supplier in the market.
The local currency has been on a downward
spiral since the CBN eventually took away the
currency price ceiling it had subtly placed after it
officially floated the currency mid last month.
The depreciation in the Naira is also mainly
attributed to the lack of supply from CBN
following reports that the apex bank had
reduced its forex allocations to sales in the
interbank market due to other pressing needs
for the foreign exchange resources amidst
dwindling dollar revenue from oil sales.
Before now, s upplies other than the CBN had
avoided the inter-bank forex market over
complaints that the official rates did not
represent the true value of the Naira against the
dollar, hence they find their way to push their
dollars to the parallel market segments.
According to some dealers international oil firms
who are major independent suppliers of forex
are now selling part of their hard currency
directly to petrol importers under an
arrangement with the government. They,
however, explained that they are still looking at
what will be a comfortable exchange rate for
sellers to come back to the market and that is
why the rates kept going up in the past one
week.
Last week CBN governor, Godwin Emefiele, flew
to Britain and the United States to try to lure
back investors into Nigeria’s financial market
after nearly one year they left due to CBN’s
exchange rate control policy.
Vanguard learnt the trip was unsuccessful as the
investors told the CBN team that the market was
not yet transparent enough adding that the
external reserves level was also uncomforting
for them.