The naira strengthened by N125 over the weekend to reach N1,275/$1, indicating that it is starting to gain strength against the US dollar.
The new exchange rate is 9.8% higher than what it was trading for at the end of Friday’s trading session, which was N1,400 to the dollar.This occurred as the Senate, via its Committee on Finance, demanded that all pertinent parties make coordinated efforts to save and maintain its stability.
The Senate declared that coordinated efforts were desperately needed to address the instability and ongoing depreciation of the Naira.In an interview with one of our correspondents on Sunday, currency dealers at the well-known Wuse Zone 4 market attributed the market’s trading volatility to the fluctuations in the exchange rate.
They also stated that in order to maintain market stability, the government must decide whether to devalue or raise the value of the currency.Because there was no trading activity on Sunday, the operators did not provide a selling rate.Malam Yahu Ibrahim, a trader, claimed that because of the naira’s volatility, traders were taking on excessive risk.”We take risks against ourselves every day because the naira is just swinging and I do not know how they are doing it,” he remarked.
The government should act to depreciate the dollar completely if that is its goal, or it should act to depreciate the naira and prevent fluctuations in value.
It is destroying companies.”We are not even observing any impact at all from the CBN dollar sale to BDCs.”In a previous interview, Abubakar Taura, another trader, had advised caution in trading activity due to ongoing worries that the CBN might implement some extreme measures to stabilize the naira.He stated that because of the erratic nature of the market, they were unable to forecast or guarantee the rate for Monday (today).
The Association of Bureaux De Change Operators of Nigeria is planning to unify the retail end of the foreign currency market, and this coincides with the value recovery.
According to ABCON President Aminu Gwadabe, the action will improve regulatory compliance and address volatility in that market segment.”Activating geo-mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps is part of our vision for a united retail-end forex market,” he stated.
This will make it simple for foreign exchange buyers to find BDC offices and conduct efficient transactions.Prior to the marginal gain, the value of the naira had dropped by 26.2% in just two weeks when compared to the N1,125 per dollar quote on the black market, or parallel market, on April 12, 2023.
In order to increase liquidity in the black market, the Central Bank of Nigeria approved last Monday the distribution of $15.83 million to 1,583 BDC operators. Demand in dollars drives the naira to 1,420/$.The naira continued its declining trend against the US dollar at the official foreign exchange window, closing at N1,339/$ on Friday, according to data from the FMDQ securities exchange.
In comparison to the N1,309/$ quoted on Thursday, this indicates a 2.24 percent depreciation, indicating a full week of depreciation at the official market.$1 billion worth of goods and services were exchanged at the Nigerian Autonomous Foreign Exchange Market by willing buyers and sellers.Senate respondsConcerned about yet another round of naira devaluation on the foreign exchange market, the Senate, via its Committee on Finance, requested coordinated actions from all pertinent parties to save and maintain the market’s stability.
The Committee’s Chairman, Senator Sani Musa (APC Niger East), stated in a statement released on Sunday that coordinated efforts were desperately needed to address the instability and ongoing depreciation of the Naira.The recent depreciation of the Naira highlights the necessity of taking preventative action to preserve the stability and resilience of our currency, he declared.
Nigeria’s economy is beset with serious problems that are made worse by both internal and external forces.The persistent depreciation of the Naira against major foreign currencies has become a pressing concern, despite President Bola Tinubu’s numerous initiatives, bold but necessary steps, and policy decisions aimed at stabilizing and bolstering economic growth. The Senate Finance Chairman bemoaned, “The recent depreciation of the Naira underscores the need for proactive measures to safeguard the stability and resilience of our currency.””The Senate Committee on Finance is committed to working collaboratively with relevant stakeholders to implement effective policies and strategies,” Senator Musa continued.
“We are closely monitoring the situation.””We must address the underlying causes of the depreciation of the Naira, which include but are not limited to changes in the price of oil globally, fiscal deficits, and structural imbalances within the economy.”To lessen the effects of the Naira depreciation and promote economic stability, the Senate Committee on Finance is investigating a variety of policy options.”
This entails close monitoring of fiscal policy, interaction with important parties, and development of focused interventions to assist important economic sectors.
The committee also hopes that our economic managers will strictly follow the guidelines and standards established by this administration in order to guarantee that we attain the intended results in leading Nigeria to economic growth and prosperity.
“I implore every Nigerian to be watchful and resilient as we navigate these uncertain times. By working together, we can overcome the obstacles to our economy and create a path that leads to prosperity for everybody.