No panic but we have to report facts: Naira is losing value, and the economic and policy gravitational force has been unable to bring anything to equilibrium. “Amid scarcity of foreign currency, the naira exchanged at N445 against the dollar in the parallel market on Monday…against the British pound at N535; and against the Euro at N455.”, Premium Times reports.
Amid scarcity of foreign currency, the naira exchanged at N445 against the dollar in the parallel market on Monday.
Analysts attributed the development to scarcity and shrinking liquidity in the forex market.
The president, Association of Bureax De Change Operators of Nigeria, Aminu Gwadabe, attributed the development partly to the extension of airport lockdown across the country. The extension further affected the access to forex by the bureau de change operators, he explained.
Last week, as part of efforts to curtail the spread of coronavirus, the Nigerian government extended the ban placed on flights in the country.
“The extension of airport lockdown as well as sale of forex to the BDCs pending when air travels resume has impacted the naira negatively from N425/$ to $445/$ in the parallel market,” Mr Gwadabe was quoted as saying on Monday by Punch newspaper.
The truth is this: banks do not have enough hard currency to serve customers and provided airports remain closed, this problem will remain. Typically, a big chunk of the foreign currency liquidity comes from visitors into Nigeria.
The next three months would be the most consequential period, post Covid-19, if Nigeria hopes to change the trajectory of the deterioration of Naira. We are already in a vicious loop and unless we find a way to break out, this can turn out very ugly.