Nigeria’s naira to dollar exchange rate weakened at the Investors and Exporters window on Friday, February 19, 2021, amid rising inflation.
The naira to dollar exchange rate depreciated and closed at N410 to one dollar compared to N407.8/$1 recorded on Thursday, February 18, 2021, indicating 0.54 percent devaluation.
Naira traded for as high as N424.14 at the Investors and Exporters window as the demand for the greenback continues to rise by both legitimate importers and foreign investors that wanted to repatriate their earnings.
At the parallel market, the naira depreciated to N478 to one dollar on Friday from N477 per dollar the previous day.
The National Bureau of Statistics, NBS, inflation report stated that Core inflation, which captures prices of non-food commodities and services, rose to a three-year of 11.85 per cent in January 2021, buoyed by the price increase in housing, water, electricity, gas, and other fuel and transport component.
One of the factors responsible for the rising core inflation is the huge gap between the exchange rate at the black market and NAFEX market, the Director-General, Lagos Chamber of Commerce, Dr. Muda Yusuf, said.
According to him, the huge disparity and scarcity of forex have disrupted production plans of many manufacturing firms, following acute shortages of raw materials and other inputs.
He called on the government to stabilise the foreign exchange market to reduce liquidity concerns and associated uncertainties and disruptions in the economy.
A forex trader at AZA Finance, Oghenefejiro Eduviere, also advised the Central Bank of Nigeria to deploy an unscheduled crawling-peg devaluation in order to close the gap between the spot market and parallel rates, which remained almost 20 per cent apart.