The fortunes of the national currency, the Naira took a sharp turn downwards
yesterday as it fell by 270 kobo, with the parallel market exchange rate rising
to N180 per dollar from N177.3 on Monday.
Ever since the beginning of the month, the Naira has fallen against the US
dollar by N7.9 at the interbank market, and N10 at the parallel market.
Interbank and parallel market operators attributed this sharp depreciation
to restrictions introduced by the CBN to curb foreign exchange demand at the
official market. The restrictions were imposed by CBN to curtail the persistent
decline in the nation’s external reserves following continued decline in price
of crude oil. Within three months, the price of crude oil fell from $100 per
barrel to $78 per barrel.
The sharp decline in crude oil prices occasioned apprehension among foreign
investors, who believe that with decline in revenue from crude oil, and the CBN
using the reserves to defend the Naira, it would not be long before the Naira
suffered sharp depreciation. Hence they moved their money out of the country by
divesting from the nation’s stock market and FGN bonds.
Falling crude oil prices, coupled with depleting Excess Crude Account has
triggered obvious anxiety about the value of the Naira. Stocks have also been
hit as a result.
The Central Bank of Nigeria (CBN) yesterday bowed to banks’ demand for the
removal of the 10 kobo margin limit imposed on intervention dollars.
No comments:
Post a Comment