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Naira in free fall against dollar, now exchanges for $1/N490

So, who is afraid of a stronger naira? By Henry Boyo

In what seems like a continuous acute shortage of forex, the Naira on Monday slipped further against the United States dollar 487 on Friday to 490.

Before falling to 487 on Friday, the local currency had consecutively closed flat at 485 for four days last week.

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The severe shortage of the dollar has put the naira under persistent pressure at both the official and parallel forex markets.

The global crash in the prices of crude oil, Nigeria’s main forex earner, has also brought untold hardships and instability of the nation’s currency.

 

The naira had, however, consistently closed around 305.5 a dollar at the official window since August.

A few weeks ago, the naira closed flat at 470 against the greenback over a period of a week and some days.

The naira had plunged to 470, down from 455 on the back of a fresh dollar shortage at the official and parallel forex markets.

Recall that Travelex and First Bank of Nigeria Limited commenced the sale of forex to Bureau De Change operators about two months ago after getting the Central Bank of Nigeria’s approval.

Some forex traders, however, said the scheme had failed to ease the biting dollar shortage in the country.

The President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said the sale of dollars to the BDC operators had yet to cut across the country.

This, he said, was partly responsible for the continuous acute shortage of the United States dollar.

“There are still logistics problems in selling forex to all the BDC operators; this is what is causing this relative scarcity,” he said.

The CBN had asked the International Money Transfer Operators to sell dollars directly to the BDC operators to boost liquidity and narrow the gulf between the parallel and official market rates.

The CBN has however promised to implement policies aimed at making the naira stronger to the dollar. A feat many financial analysts said if achieved, 2017 will turn out to be a strong fiscal year.

 

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