On Sunday, the naira maintained its downward trend versus the dollar, trading at 876/$ in the parallel market.
According to certain Bureau de Change workers, the local currency had previously swapped to the dollar at 820 a week earlier.
Since the Central Bank of Nigeria unified the country’s exchange rates in recent weeks, the naira has continued to fall against the dollar due to a liquidity crisis, speculation, and other issues.
Alhaji Isa Abdul, a Bureau de Change operator in Lagos, said that, “Naira is currently bought and sold at 850/$ and 876/$.” The exchange rate has been volatile for some time.”
“Things are getting more expensive,” said Abubakar Ibrahim, another Bureau de Change operator. We were buying and selling the naira around 850/$ and 865/$ on Friday.”
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, stated that the foreign exchange market was clearly under pressure due to a variety of issues.
According to him, there has been an unusual rise in monetary expansion in the recent month.
“Money supply increased by an unprecedented 15% in one month between May and June 2023,” Yusuf remarked. Broad money increased by nearly N9 trillion, from N55.7 trillion to N64.9 trillion. This rate of monetary expansion is unprecedented. Obviously, this had an impact on the currency rate.”
He stated that the monetary authorities should analyze the sudden increase in the money supply and take steps to limit future expansion.
“Such dramatic growth in the money supply poses a significant risk to macroeconomic stability, especially price stability,” he warned.
He said that there has been a cumulative backlog of unmet foreign exchange demand in the billions of dollars over the previous few years as a result of significant illiquidity in the foreign exchange market.
The burden of the backlog of unfulfilled demands and other maturing currency-related obligations had been unleashed on the investors’ and exporters’ window, he added, with a more liberalized forex market.
However, the naira gained 3.24 percent against the dollar in the preceding week on the Investor & Exporter forex window.
According to data from FMDQ Securities’ official trading portal, the naira gained 3.24 basis points, increasing its value to 777.82 per dollar. It closed last week at 803.90/$.
The naira traded at an intraday high of 855/$ and a low of 665/$ on Friday, with a total turnover of $77.99m.
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