The Nigerian naira have seen it all when it comes to going up and down in the FOREX market. Many experts continues to fault the many interventions by the central bank of Nigeria (CBN) in saving the local currency based on its unsustainable tendencies.
Another reason has been given by a financial expert, Alhaji Aminu Gwadabe, who has blamed the Central Bank’s propensity for last minute solution for the misfortune of the naira at the foreign exchange mark
The Guardian reports that: Gwadabe, who is also the President, Association of Bureau De Change Operators of Nigeria (ABCON), said recent depreciation of naira could be traced to speculators’ onslaught and resistance by the banking industry.
Speaking during a chat with reporters, the dealer noted that refusal by some banks to sell the invisibles, such as, personal and business travel allowances frustrated naira recovery.
Recalling that the CBN had recently accused banks of frustrating its policies, the ABCON chief said it was ironical that the naira started losing strength in spite of the CBN’s review of the rates from N375 to N360 to a dollar.
“The naira,” he remarked, “started trading on Monday with a promising outlook for sustained strength against the dollar and other currencies, but it began to somersault at the middle of the week; ending deeper northward to close at N394 to a dollar on Friday, translating to 10 per cent depreciation of what was recorded during the week.’’
Gwadabe aded that removal of disparity in applicable exchange rates among the BDCs, Travelex and the banks, should have strengthened the nation’s currency, stressing that the battle for the soul of the naira would be won if the CBN could boost liquidity to the BDCs for effective unification of rates.
While the CBN has had a chest-beating moment recently when the naira traded below 400 naira at the parallel market and also boasted that the interventions will take speculators out of the FOREX market, it is yet to be seen how it is going to be sustained. Giving the two challenges facing the interventions, namely: it is not sustainable and the knack for last minute solution.