The value of the naira is expected to remain low but relatively stable this week ahead of the rollout of the foreign exchange policy of the Central Bank of Nigeria next week.
Last week, the currency had sold as high as N360 to the dollar after the federal government announced the partial deregulation of the petroleum sector.
Oil firms had been told to seek foreign exchange from the secondary market, triggering an increased pressure on the currency at the parallel market as the naira had declined in value from N321 to N360 within three days.
Oil marketers had last week bought $13,854,387.72 from the CBN through eight commercial banks at N197.5 and their demand for foreign exchange is expected to increase the pressure on the naira at the parallel market.
The president of the Association of Bureau de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, told LEADERSHIP that the pressure on the naira would continue to be strong but the value is expected to be relatively stable as the market awaits the decision of the apex bank.
“There has been a calm after the initial announcement which saw the naira drop to N360, which it is at now, and is expected to remain so until the CBN announces their plan,” he said.
He, however, said that expectations are that the apex bank would devalue the currency as according to him, there is a lot of pressure from investors and the IMF to do so, stressing also that the dwindling level of the external reserves and low commodity prices makes it expedient. The reserves have continuously been depleted, standing at $26.78 billion as at May 12, 2016, according to data on the website of the CBN.
Gwadabe assured that the parallel market is capable of meeting the needs of the oil marketers, saying, “When the 41 items were banned there was pressure but then it reduced so that the parallel market is capable of meeting the needs of the oil marketers. The Nigerian parallel market is huge even though it is 15 per cent but its activities represent a huge volume.”
Last week, the CBN had sold $93.563 million through nine banks to oil marketers, manufacturers and importers for school fees and travel allowances, and of this amount, oil marketers had taken up $13.854 million.
Source : Leadership