The continued scarcity of foreign exchange on
Wednesday pushed the naira to an all-time-low of
420 against the United States market.
Wednesday pushed the naira to an all-time-low of
420 against the United States market.
The currency hit its record low the same day that
data released by the National Bureau of Statistics
showed that the economy was in recession.
The naira has continued to weaken in the parallel
market, defying attempts by monetary authorities to
reverse its slide.
For instance, the CBN had on June 20 lifted its 16-
month-old currency controls and auctioned about
$4bn on the spot and futures market to clear a
backlog of dollar demand, to help boost interbank
market trading.
On Tuesday, the naira had dipped to 418 against
the dollar at the parallel market, a day it closed at
414.
Some analysts expressed concern about the likely
impact of the NBS report, which painted a negative
picture of the economy, on the currency and
investment.
The NBS report showed that the GDP growth rate
slid further from -0.36 per cent in the first quarter to
-2.06 per cent with inflation rising to 17.1 per cent
from 16.5 per cent.
It also showed that unemployment rate had
increased to 13.3 per cent from 12.1 per cent and
that the investment inflows had dropped to the
lowest levels at $647.1m from $710m.
The country’s foreign reserves have also witnessed
a decline, further threatening the naira.
Bureaux de Change operators have, however, raised
the hope of a gradual appreciation of the local
currency in the near term as the CBN licensed 11
new international money transfer operators to
address the dollar supply side.
“Depending on the effective implementation of the
central bank’s policy, the appointment of new
international money transfer operators will ensure
that banks will have more dollars to sell to bureaux
de change and provide the needed liquidity in the
market,” the President, National Association of
Bureaux de Change Operators of Nigeria, Aminu
Gwadabe, toldReuterson Wednesday.
The Special Adviser to the President on Economic
Matters, Dr. Adeyemi Dipeolu, said the NBS report
had also indicated that the second half of the year
would be better.
“Besides the growth recorded in the agriculture and
solid mineral sectors, the Nigerian economy in
response to the policies of the Buhari presidency is
also doing better than what the IMF had estimated
with clear indications that the second half of the
year would be even much better,” he said.
Financial analysts have called on the Federal
Government to declare a national emergency on the
economy to avoid a situation where the current
recession will result in a full-blown depression.
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