These are definitely
not interesting times for the nation’s economy, particularly the national
currency, the naira, no thanks to the depleting reserves and the subsequent
banning of importers of 41 items from the foreign exchange market by the
Central Bank of Nigeria.
Barely 10 days after
the CBN stopped forex sale to importers of rice, textile and 39 other items,
the naira on Wednesday crashed to 230 against the United States dollar at the
parallel market, down from 218 recorded on June 23 when the new forex rule was
introduced.
The policy, which has
pushed huge forex demand from the interbank (official) market to the parallel
(black) market and the Bureau de Change retail segment, has led to artificial
scarcity of dollar and other major foreign currencies as operators now hoard
them in anticipation of higher prices.
The naira had fallen to
220, 223, 226.5 and 228 against the dollar in the past one week.
Black market and BDC
operators, however, told Punch’s correspondent that serious dollar liquidity
squeeze was already hitting the market and operators were no longer in
possession of huge stock of forex to meet rising demands, especially from the
importers of the banned items.
Using the CBN figures,
analysts had estimated that about $5.7bn quarterly forex demand was being
transferred from the official interbank market to the black market.
“The situation is
getting critical now. There is serious dollar liquidity squeeze in the market
now. The demand is overwhelming and both the black market and the BDC segment
can no longer meet the demand,” a black market operator told Punch’s
correspondent on Wednesday.
“The market is very
volatile now as a result of the restrictions placed on about 41 items by the
central bank. Most importers are now patronising the parallel market to source
their dollars,” the head of a BDC, Mr. Harrison Owoh, told Reuters on
Wednesday,.Meanwhile, the Association of Bureau De Change Operators has written
to the CBN asking it to intervene in the dollar scarcity in the parallel market
and the BDC segment to save the naira from crashing further.
No comments:
Post a Comment