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Naira sinks at investors window, parallel FX rates worsen

THE Nigeria’s indigenous currency, naira is losing value in both the official foreign exchange window and the parallel market, with the Central Bank of Nigeria (CBN) rejecting demand pressures during foreign currency scarcity.

The naira declined by nearly 0.3 percent to N419.50 per US dollar at the foreign exchange window for investors and exporters. The local currency began depreciating again early this week, trading at N418.33 on Wednesday.

According to market statistics, the open indicative rate finished at N417.81 to the dollar on Thursday, with a high of N444 to the dollar recorded during the day’s trade before settling at N419.50.

During the day’s trade, the Naira fell as low as N410 to the dollar. On Thursday, a total of $124.85 million in foreign exchange was transacted at the official Investors and Exporters window.

According to FX dealers, the parallel market exchange rate has deteriorated to N601, and certain Bureau de Change have indicated that they are unable to meet demand.

Analysts told MarketForces Africa that the naira could be devalued again because, despite high oil prices, the accumulation of external reserves has slowed. Due to lesser production capacity, Africa’s largest economy has been unable to reach the oil group’s quota.

The government’s inability, which it blames on years of mismanagement in the oil infrastructure, has exacerbated economic problems. Aside from that, due to an imbalance in the oil supply chain, subsidies payments have risen to N4 trillion.

Nigeria spends billions on imported refined crude oil for domestic use, but the country earns money by exporting raw unrefined petroleum.

The Central Bank of Nigeria, on the other hand, has maintained its stance that it will not depreciate the native currency. The naira, on the other hand, has been depreciating in the foreign exchange markets.

Despite foreign interest complaints about the Central Bank of Nigeria’s multi-tiered interest rate policy, several exchange rates have remained.

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Naija Times