By Chinwendu Obienyi
As demand for foreign exchange continues to surge ahead of December purchases, there seem to be no respite for the Naira yet against and the US dollar with the Nigerian currency still trading at N570/$1, according to Daily Sun findings.
The Naira on Monday, October 18, at the Investors and Exporters (I&E) window appreciated against the US dollar at N414.73/$1, compared to a marginal gain of 0.08 per cent from N415.07/$1 recorded on Friday.
It however gained 0.09 per cent to N572/$1 on Monday, October 18, 2021 at the parallel market compared to N573.5/$1 recorded at the close of trading on Friday, October 15, 2021, according to information obtained from Bureau de Change (BDCs) operators in Lagos.
This came as some analysts projected that further appreciattion that could force the dollar down to the price range of N400-N500/$1 was likely in the weeks ahead. However, checks on the price of the dollar on Wednesday, revealed that the price position of the dollar has not changed as a BDC operator in Lagos told Daily Sun via a telephone call that the price is N571/$1, adding that the demand for FX might increase till the end of the year if the Central Bank of Nigeria (CBN) does not act swiftly.
Earlier, CBN Governor, Godwin Emefiele, had stated that the only rate he recognises is the I&E window rate, citing that the black market rate is fixed by illegal forex operators.
“Nigeria was the only country where the CBN sold foreign exchange from their reserves to the BDC operators. The question we ask ourselves is why it took us so long to ban their operation. The only exchange rate I can recognise today is the I&E window rate, which is the rate we expect everyone that wishes to procure foreign exchange to use. I don’t recognise that there are any other rates in the market,” He said.
In response to the development, the Founder/Head at Probusiness Consults and an economic analyst, Chukwuemeka Iheonunekwu, said that the free fall of the Naira is a hydra -headed monster that requires diverse and intensive intervention, adding that the Naira might fall to over N1,000 per dollar before 2023.
“I already suspect that the gap in FX supply will push it to N600 by this December as demand increases. One of the major troubles of the Naira is that the CBN thinks it can use a duct tape strategy to prop up its value using income from oil. They don’t want market forces to determine the Naira value because it would reveal that the Naira is much weaker than they want us to believe”, he said.