When the Naira traded at NGN545/$1 on Friday, September 10, 2021, we thought that was the worst for the Nigerian currency.
But NGN/USD has depreciated even further at the close of trading Tuesday, September 14, 2021, it ended the day at NGN557, corroborating our earlier analysis that the NGN was heading to NGN600/USD.
On the previous day, it was NGN550 and in less than 24 hours, it dipped further by NGN7, showing a bad sign that the naira is most likely to drop further against major foreign currencies in the days ahead.
At the time of publication £1 was NGN760 while €1 was NGN645, showing that the Pound Sterling gained more in less than 24 hours against the naira while the same goes for Euro. On September 13, it was NGN750/£1 and NGN636/€1
What lies ahead?
The depreciation of the naira means that the forex scarcity in the parallel market popularly known as the black market among Nigerian buyers and sellers will continue to put pressure on the naira.
The recent policy of the Central Bank of Nigeria (CBN) that it will no longer sell foreign exchange to more than 5,500 Bureau De Change operators in Nigeria is the effect of what Nigerians are seen at the FX market.
Will CBN rescind its decision?
It’s most unlikely that the Godwin Emefiele-apex bank would rescind the decision to sell forex to the BDC operators.
On July 27, the CBN had described them as being one of the groups that are working against the fx policy of Nigeria.
Besides, the Federal Government has persistently said it’s unfair to base the financial analysis on the basis of the price of FX at the black market, saying it isn’t the true reflection of the Naira.
Going by this, CBN is not going to change its decision about not selling forex of $20,000 to each of the BDCs operators (weekly).
That may however change in future, but not now.