The naira is on a downward spiral again after government’s intervention handed the currency a breather for about a week.
The currency fell to N900 a dollar on Wednesday on the black market, a day after it closed at N770.7 on the official window.
The naira has struggled for years against a stronger dollar, needed by many for everything from importation to payment of fees abroad to profit repatriation by companies.
The currency reached a record fall last two weeks at the parallel market, trading as low as N995 – two months after the Central Bank of Nigeria removed restrictions and allowed it to trade more freely.
After the CBN announced it would intervene last week, the currency firmed up dramatically to between N790 and N800.
The currency began to lose value yet again this week despite an announcement by the state-oil company NNPC that it had secured a $3.5 billion loan to help support the currency.
“NNPC and Afrexim Bank have jointly signed a commitment letter and term sheet for an emergency $3bn crude oil repayment loan,” the company said in a statement last Wednesday.
It said the “signing which took place today at the bank’s headquarters in Cairo will provide some immediate disbursement that will enable the NNPC limited to support the Federal government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.”
Not enough
Figures quoted on AbokiFX, which collates naira quotes on the black market, showed that the naira traded in Lagos between N890 and N900 mid Wednesday.
In the peer-2-peer market used for cryptocurrency trading, the naira fell to as low as N910 against the dollar on Wednesday before firming to N902.
The CBN has indicated it will bring back bureaux du change operators into the forex market as a way to help manage the foreign exchange crisis.
On Monday, US lender JP Morgan revealed that as of December 2022, Nigeria had a net foreign reserve of about $3.7 billion – a far cry from the over $34 billion the CBN claimed.
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