₦airaland Forum

THE widening gap between the demand and supply of dollars in the banks and at the parallel market has continued to worsen the value of the naira, findings by The PUNCH have revealed.

In less than three weeks, the naira lost N100 after sliding from 860/$ to 960/$ at the parallel market as of Friday.

Before the Central Bank of Nigeria enabled the free float of the naira against other global currencies in June, the naira had traded at 471/$ at the Investor & Exporter window.

However, on June 13, a day after the regulator floated the local currency, the naira rose to 664/$ the next day.

However, the naira which traded in a close margin at both the official I&E window and parallel market soon began to witness serious volatility in the black market.

After crossing the N900/dollar ceiling at the parallel market last week, the local currency tumbled to 925/dollar in Lagos.

On Friday, the naira reached a high of 799/$ before closing at 740.60/$ at the I&E forex window. However, at the parallel market, the naira closed at 930/dollar in Lagos and 960/$ in Abuja at the parallel market.

The development came as dollar shortage hits banks with several lenders complaining of not having enough greenback to meet customers’ demand.

At the parallel market, currency dealers also complained of dollar shortage.

Bank officials said the CBN removal of cash deposit limits on domiciliary accounts in June had led to the repatriation of funds through the banks.

As a result, he said the demand for the dollar had outweighed the supply significantly.

“Some of the dollars are being repatriated through the banks but the demand is still higher than supply because everyone is still sourcing for dollar for imports, PTA, BTA, others,” an official of a lender, who chose to speak on condition of anonymity because he was not authorised to speak on the matter, said,

“Nigerians are still hoarding dollar, customers are still hoarding FX because they don’t trust the policy. Banks are not getting forex supply from the CBN regularly like before,” he added.

Also, an official of tier-1 bank, who pleaded anonymity, said, “Before, the banks used to get dollar from the CBN every week but now, it has reduced drastically; we have not been getting again. Banks are sourcing for forex everywhere. The banks don’t have enough. We have not been getting supply from the CBN for weeks now.”

The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, in a chat with our correspondent, said liquidity squeeze in the FX market had continued to put the naira under heavy attack from speculators.

He said, “The dwindling supplies in the I&E window shifted the demand to the parallel market where volatility and spikes is most pervasive. The entire forex market is plagued by liquidity shortages.

“The banks, as a result of the supply shortages, are limiting their available position for the financing of visible letters of credit and abandoning the invisible request like PTA, school fees, medicals of their clients and inadvertently adding more pressure in the parallel market.”

He added, “As it is, most licensed BDCs due to their demand for KYC requirement have lost their clients to the parallel and undocumented space with no regulation and standardisation. It is indeed a difficult time for most of our members as we are excluded from the harmonised market.”

Proffering solutions, Gwadabe said Nigerians should aspire to have a stable exchange rate devoid of illegal economic behaviour like arbitrages, hoarding and panic buying.

“ABCON is desirous to partner the apex bank and the Federal Government for an elaborate dialogue and engagement to champion paths to naira recovery,” he said.

He added that the financial architecture should be reviewed to include BDCs in the harmonised markets.

The monetary and fiscal authorities should create enabling environment and friendly policies, he said.

Slides in faster than prick into a pvssy

abhosts:
Ironically, those in power do not seem to have any sense of urgency to fix Nigeria's Economy. Na Niger matter them carry for head 24/7.

I think it is time for the CBN to introduce some capital controls to save the Naira. Most of the strain on the Naira is due to dollar hoarding and speculative buying. The CBN should tax all foreign currency bank accounts accumulating dollars but not spending it within a specific time frame. So if you deposit $10k within a calendar month but spend less than 60 percent of it, you should be taxed 1 percent of your unspent deposit. This would stem the tide against speculation and hoarding.

Good idea but how am I going to adopt your idea when it is going to affect me? That's why we are all in this terrible situation.

It is not well again oo

abhosts:
Ironically, those in power do not seem to have any sense of urgency to fix Nigeria's Economy. Na Niger matter them carry for head 24/7.

I think it is time for the CBN to introduce some capital controls to save the Naira. Most of the strain on the Naira is due to dollar hoarding and speculative buying. The CBN should tax all foreign currency bank accounts accumulating dollars but not spending it within a specific time frame. So if you deposit $10k within a calendar month but spend less than 60 percent of it, you should be taxed 1 percent of your unspent deposit. This would stem the tide against speculation and hoarding.

Lol.

You started well. But your subsequent recommendation is so dumb, I wish it had a face so I could smack it!

Like, the apex bank should coerce people to spend monies saved in their domiciliary accounts using the instrument of tax? If I wanted to spend money, would I even have any need to take it to a bank? Even as the money sits in the bank, it's being used for businesses by the banks. So instead of my money fetching me interests, the bank will rather wake up and impose a 1% tax on it because I refused to use it?

Try it, and watch your economy collapse in a month. Even Greece is going to be a joke compared to the catastrophe that would befall Nigeria. People will simply convert their monies in domiciliary accounts into digital coins. The ones that can't, will withdraw and find other means to save those monies. The Nigerian economy would be stripped of forex. Then you will suffer the consequence of an economy that implements this sort of nonsensical recommendation.

BoldBrainz:
Lol.

You started well. But your subsequent recommendation is so dumb, I wish it had a face so I could smack it!

Like, the apex bank should coerce people to spend monies saved in their domiciliary accounts using the instrument of tax? If I wanted to spend money, would I even have any need to take it to a bank? Even as the money sits in the bank, it's being used for businesses by the banks. So instead of my money fetching me interests, the bank will rather wake up and impose a 1% tax on it because I refused to use it?

Try it, and watch your economy collapse in a month. Even Greece is going to be a joke compared to the catastrophe that would befall Nigeria. People will simply convert their monies in domiciliary accounts into digital coins. The ones that can't, will withdraw and find other means to save those monies. The Nigerian economy would be stripped of forex. Then you will suffer the consequence of an economy that implements this sort of nonsensical recommendation.

Lol. How do you think the Russian Ruble has survived the barrage of western sanctions? Today, all savings in Pounds, Euro and Dollars are levied every month in Russia to discourage citizens from dumping the Ruble any further.

abhosts:
Lol. How do you think the Russian Ruble has survived the barrage of western sanctions? Today, all savings in Pounds, Euro and Dollars are levied every month in Russia to discourage citizens from dumping the Ruble any further.

Russia ruble that tumbled from 60 to 100 presently.

abhosts:
Ironically, those in power do not seem to have any sense of urgency to fix Nigeria's Economy. Na Niger matter them carry for head 24/7.

I think it is time for the CBN to introduce some capital controls to save the Naira. Most of the strain on the Naira is due to dollar hoarding and speculative buying. The CBN should tax all foreign currency bank accounts accumulating dollars but not spending it within a specific time frame. So if you deposit $10k within a calendar month but spend less than 60 percent of it, you should be taxed 1 percent of your unspent deposit. This would stem the tide against speculation and hoarding.

Where have you been all these while?
This command-based economy don't work.
CBN tried various feel-good measures which eventually backfired.
If you penalize dorm account owners, people will simply stop depositing their dollars.
Even if you fight crypto, people will switch to batter system.

abhosts:
Lol. How do you think the Russian Ruble has survived the barrage of western sanctions? Today, all savings in Pounds, Euro and Dollars are levied every month in Russia to discourage citizens from dumping the Ruble any further.

Russia is in a war situation, goddammit!

How do you even get off making that kind of comparison?! Russia is a major production hub in the world. Russia can survive on its own domestic capabilities. Just like we have witnessed since this war began. Nigeria on this hand, depends entirely on imports to survive. Even the water we drink is purified and processed with imported materials and equipments. And you have no right to grandstand against a currency that feeds you.

Tinubu was so stupid to have allowed the dollar flow and operate independently, hoping it would be regulated by market forces. It's often very frustrating to even realise these leaders are believed to have been sensible by virtue of their ages.

Any move you make against the dollar at this very point is going to crumble the economy. You can't tax it. You can't let other forces determine its flow. It is counterproductive to do any of that.

abhosts:
Lol. How do you think the Russian Ruble has survived the barrage of western sanctions? Today, all savings in Pounds, Euro and Dollars are levied every month in Russia to discourage citizens from dumping the Ruble any further.

And you think the average Nigeria will be happy that his dollar savings is being taxed? Russia no be Nigeria. Most Nigerians will avoid using Nigerian banks.

Naira will continue to fall. Nothing anyone can do about it. Is it really difficult for you all to understand? Nigeria is an import-based economy. Virtually nothing is produced in this country that is worthy of export. Save for crude oil. $$ is not our local currency. So for you to have $$ locally, you need to export goods and services and then people (foreigners) can pay for it.

Exporting means people are working locally and earning wages/salaries. It means the factories are open and working. It means the manufacturing hubs are busy. What do you think the 33.1% unemployment rate (the highest in the world) truly means?

Add 33.1% unemployment to the policymakers at the government level which is completely detached from the realities on the ground. Add it to bloated governance that knows nothing apart from sharing monies. Add it to incompetence at all levels of government and governance in Nigeria.

The problem in Nigeria is bad leadership. Fixing bad leadership starts with a transparent and true electioneering process where people are freely allowed to elect their leaders, not the sham of elections we have seen from INEC since 1999 until now. Fix the politics first. The politics will fix the economy and on and on.

Sai agbado till 2099
Una leave better person go vote pampers wearing grand pa due to tribalism?
Una go explain tire

Barywhyte:
Naira will continue to fall. Nothing anyone can do about it. Is it really difficult for you all to understand? Nigeria is an import-based economy. Virtually nothing is produced in this country that is worthy of export. Save for crude oil. $$ is not our local currency. So for you to have $$ locally, you need to export goods and services and then people (foreigners) can pay for it.

Exporting means people are working locally and earning wages/salaries. It means the factories are open and working. It means the manufacturing hubs are busy. What do you think the 33.1% unemployment rate (the highest in the world) truly means?

Add 33.1% unemployment to the policymakers at the government level which is completely detached from the realities on the ground. Add it to bloated governance that knows nothing apart from sharing monies. Add it to incompetence at all levels of government and governance in Nigeria.

The problem in Nigeria is bad leadership. Fixing bad leadership starts with a transparent and true electioneering process where people are freely allowed to elect their leaders, not the sham of elections we have seen from INEC since 1999 until now. Fix the politics first. The politics will fix the economy and on and on.

make una stop talking all this nonsense talk about import. Every country in Africa import why is NIGERIA different. Go to Ghana, Kenya, Zambia Benin, etc there currency is stable except nigeria. We even export more than them , have the 2nd largest foreign reserve in Africa. The early you agbadorian realised the fall of naira is because of maladministration the better for your redemption.

okeysoninv:
make una stop talking all this nonsense talk about import. Every country in Africa import why is NIGERIA different. Go to Ghana, Kenya, Zambia Benin, etc there currency is stable except nigeria. We even export more than them , have the 2nd largest foreign reserve in Africa. The early you agbadorian realised the fall of naira is because of maladministration the better for your redemption.

The thing tire me i swear.
The naira started falling like snow when Buhari came in and it has continued ever since.
The bolded is the truth that will continue to haunt them.

ogmask:
The thing tire me i swear.
The naira started falling like snow when Buhari came in and it has continued ever since.
The bolded is the truth that will continue to haunt them.

don't mind they have blamed alot of things ,, like refinery, export , import and the price of crude oil. Meanwhile today the price of crude oil is high yet naira is still falling. Prior before then what was our export when dollar was nearly stable during 16 yrs of PDP regime. The truth lies with cabals of this nation, they are the reason the currency is falling. CBN is not regulating this aboki . This is where the round triping, arbitrage traders are having field day. In fews days naira will cross 1000+ .

It will favor me and my family. - Agbado

abhosts:
Lol. How do you think the Russian Ruble has survived the barrage of western sanctions? Today, all savings in Pounds, Euro and Dollars are levied every month in Russia to discourage citizens from dumping the Ruble any further.

Ruble is gone to the dust. I don't know who is feeding you with all these fake news.

Ghana cedi is doing bettee than Russian Ruble.