As the scarcity of foreign exchange (forex) bites harder, most Nigerians that have children schooling abroad have decided that after this summer holiday, their children will settle down in Nigerian universities.
This is because, they have found it increasingly difficult to source for foreign exchange to pay oversea school fees, among other expenses that are in dollar denomination.
Ola Awoindeinde, a chartered accountant based in Lagos told LEADERSHIP that most of his friends who have their children schooling abroad have started looking for appropriate schools in Nigeria to admit their children who are currently on summers.
According to him, there are cases where the parents have naira, but could not find dollars to buy. In some other cases, the dollar has simply become too costly for them to afford.
LEADERSHIP investigation shows that the naira has continued to swing as the factors of demand and supply continued to fluctuate.
Findings revealed that exporters who are expected to sell dollars at the inter-bank market to increase dollar supply prefer to sell to the parallel market where the rates are higher, thus starving the official market of the much needed foreign exchange.
The result is that naira continues to depreciate against the dollar, making it difficult for parents who have their children in oversea schools to source foreign exchange easily.
Analysts say those that have taken the decision to bring their children back to Nigerian universities may have made a very wise decision because with the removal of spread limits by the Central Bank of Nigeria (CBN), the naira is likely to depreciate to close to N400 to the dollar before it starts finding a more genuine market level.
Naira forwards rose to record highs and volatility surged after the CBN removed a limit on bid-offer spreads in the foreign-exchange market, raising expectations the currency is set to extend declines as it trades more freely.
Three month non-deliverable forward contracts jumped 4.3 per cent to a record N329.5 per dollar, while contracts maturing in a year rose 4.3 per cent to N366.5, also the highest level on a closing basis. One-week historical volatility increased to 26 per cent, compared to an average of 8.6 per cent over the past year, according to data compiled by Bloomberg.
While the naira weakened 1.1 per cent to N287.5 versus the dollar in the spot market, having swung between N280.22 and N293.38, little trading took place, according to David Willacy, a currency trader at INTL FCStone Ltd.
On Friday, the CBN ended a rule capping the difference, or spread, between bids and offers in the foreign-exchange interbank market at 50 kobo, according to Kunle Ezun, an analyst at Ecobank Transnational Inc.
Source : Leadership