{News} Naira sinks to record low at N420 against dollar
The continued scarcity of foreign exchange on Wednesday pushed the
naira to an all-time-low of 420 against the United States dollar at the
parallel market.
The currency hit its record low the same day that
data released by the National Bureau of Statistics showed that the
economy was in recession.
The naira has continued to weaken in the parallel market, defying attempts by monetary authorities to reverse its slide.
For
instance, the CBN had on June 20 lifted its 16-month-old currency
controls and auctioned about $4bn on the spot and futures market to
clear a backlog of dollar demand, to help boost interbank market
trading.
On Tuesday, the naira had dipped to 418 against the dollar at the parallel market, a day it closed at 414.
Some
analysts expressed concern about the likely impact of the NBS report,
which painted a negative picture of the economy, on the currency and
investment.
The NBS report showed that the GDP growth rate slid
further from -0.36 per cent in the first quarter to -2.06 per cent with
inflation rising to 17.1 per cent from 16.5 per cent.
It also
showed that unemployment rate had increased to 13.3 per cent from 12.1
per cent and that the investment inflows had dropped to the lowest
levels at $647.1m from $710m.
The country’s foreign reserves have also witnessed a decline, further threatening the naira.
Bureaux
de Change operators have, however, raised the hope of a gradual
appreciation of the local currency in the near term as the CBN licensed
11 new international money transfer operators to address the dollar
supply side.
“Depending on the effective implementation of the
central bank’s policy, the appointment of new international money
transfer operators will ensure that banks will have more dollars to sell
to bureaux de change and provide the needed liquidity in the market,”
the President, National Association of Bureaux de Change Operators of
Nigeria, Aminu Gwadabe, told Reuters on Wednesday.
The
Special Adviser to the President on Economic Matters, Dr. Adeyemi
Dipeolu, said the NBS report had also indicated that the second half of
the year would be better.
“Besides the growth recorded in the
agriculture and solid mineral sectors, the Nigerian economy in response
to the policies of the Buhari presidency is also doing better than what
the IMF had estimated with clear indications that the second half of the
year would be even much better,” he said.
Financial analysts have
called on the Federal Government to declare a national emergency on the
economy to avoid a situation where the current recession will result in
a full-blown depression.
No comments