The naira maintained its downward trend versus the dollar, trading at 876/$ in the parallel market. According to certain Bureau de Change operators, the local currency had previously swapped to the dollar at 820 a week earlier.
Since the Central Bank of Nigeria unified the country’s currency rates in recent weeks, the naira has continued to fall against the dollar due to a liquidity crisis, speculation, and other issues.
a BDC operator in Lagos, Alhaji Sanni Abdul, stated, “Naira is currently bought and sold at 850/$ and 876/$. The exchange rate has not been stable for some time now.”
Another BDC operator, Alli Ibrahim, said, “Things are getting more expensive. As of Friday, we were buying and selling the naira at 850/$ and 865/$.”
Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said the foreign exchange market was evidently under pressure as a result of a number of factors. He said there was a curious surge in monetary expansion in the last month.
Yusuf said, “Money supply grew by an unprecedented 15 per cent in one month between May and June 2023. Broad money grew by over N9tn, from N55.7tn to N64.9tn. This surge in monetary growth is unprecedented. Obviously, this must have had an effect on the exchange rate.”
He said the monetary authorities should investigate this drastic growth in money supply and take steps to curb subsequent expansion.
“Such dramatic growth in money supply poses a significant risk to macroeconomic stability, especially price stability,” he said.
He said that there has been a cumulative backlog of unmet foreign exchange demand in the billions of dollars over the previous few years as a result of significant illiquidity in the foreign exchange market.
The burden of the backlog of unfulfilled requests and other maturing currency-related liabilities had been released on the investors’ and exporters’ window, he added, with a more liberalised forex market.
However, the naira gained 3.24 percent versus the dollar in the preceding week on the Investor & Exporter FX market.
According to statistics from FMDQ Securities’ official trading portal, the naira gained 3.24 basis points, increasing its value to 777.82 per dollar. It closed last week at 803.90/$. As of Friday, the naira traded at an intra-day high of 855/$ and a low of 665/$ with a total turnover of $77.99m.
