Despite the various reforms of the Central Bank of Nigeria (CBN) to prevent the naira from plummeting further, the Nigerian currency continues to sink lower in all foreign exchange markets.
Analysts have stated that the apex bank’s irregular interventions in the FX markets are to blame for the naira’s woes.
On Thursday, October 17, 2024, the local currency sank further in the official window to trade at N1,660.49 per dollar as against N1,659 it traded on Wednesday, October 16, 2024.
Currency dealers in the FX market quoted the dollar at a high of N1,670 and a low of N1,540 per dollar, leaving a margin of N130.
The development comes despite the increase in foreign exchange turnover in the official window.
According to data from the FMDQ Exchange, currency supply in the FX market on Thursday, October 17, 2024, hit $330.18 million, an increase from the $177.10 million recorded the previous day.
The naira also took a significant hit in the parallel end of the foreign exchange market, closing at N1,700 per dollar, the same rate it traded the previous day.
Dealers still maintained that they were not getting enough FX supplies from the CBN, which is the reason for the high demand for the US dollar in the black market
Janet Ogochukwu, a senior banker and economist, blamed the CBN’s intermittent and irregular interventions in the FX markets for the naira’s woeful performance.
She stated that despite the deliberate float of the local currency, some buffers should be in place to prevent a total collapse of the naira.
CBN recently disclosed that foreign exchange inflows via International Money Transfer Operators (IMTOs) rose by 47% to $2.33 billion in the first six months of this year relative to the $1.58 billion recorded in 2023.
The development comes amid CBN policies allowing eligible IMTOs to access naira liquidity at the official forex window.
Recently, the apex bank released some measures to boost the FX markets and increase remittance inflows via formal channels.
TimesNow.com.ng earlier reported that Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), had clarified that the apex bank does not determine the country’s exchange rate based on prevailing economic fundamentals.
Cardoso disclosed this while speaking as a panelist at the launch of the Nigeria Development Update in Abuja.
Vanguard reports that during his address, the CBN governor expressed optimism about strengthening Nigeria’s foreign exchange stability through closer collaboration with fiscal authorities.
Proofread by Kola Muhammed, journalist and copyeditor at TimesNow.com.ng
Source: TimesNow.com.ng
