Nigerians are in for a hard time as the Nigerian naira hits a record all time low against the pounds, dollar and euro causing price of goods to skyrocket.
The naira hit a record low of 338 against the greenback on Friday, a day after the Bankers Committee announced its decision to stop providing foreign exchange for school fees and medical bills payment.
The Bankers Committee had on Thursday announced the decision to include school fees and medical bills among the items that are not valid for forex.
Forex dealers said the continued shortage of forex in the economy and the Bankers Committee’s sudden decision to stop funding school fees and medical bills payment had combined to increase demand for the United States currency.
“The negative perception about the naira, and the demand for forex by importers who have overseas obligations have caused the demand pressure. This has been exacerbated by the recent decision by the banks not to provideforex for school fees medical bills payment,” a forex dealer said under condition of anonymity.
The local currency had closed at 335, 318, 313.5 and 310 on Thursday, Wednesday, Tuesday and Monday, respectively.
The CBN has left the official exchange rate unchanged at N197 to the dollar on its official interbank window.
“We see the naira falling further in coming days if the central bank fails to lift the dollar restriction,” the Acting President, Association of Bureau De Change Operators, Aminu Gwadabe, had said.
Tumbling global oil prices have battered Nigeria’s oil-dependent economy, with external reserves down to an 11-year low at $27.89bn on February 9, Reuters reported.
President Muhammadu Buhari is concerned that further depreciation will hurt poor Nigerians, but the CBN’s refusal to revise the pegged exchange rate has widened a chasm between official rate and the parallel market.
Last month, the central bank halted dollar sales to the BDC operators and allowed commercial banks to accept dollar deposits, in a failed effort to shore up dwindling foreign reserves.
Around 90 per cent of the nation’s foreign exchange earnings come from crude oil exports, but mismanagement of the refineries means the country must also import expensive refined fuel.
The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said it was high time the CBN came up with a forex policy that would address the forex crisis confronting the nation.
In an economic note released on Thursday, Rewane said, “Nigerians are perplexed at the endless slide of their currency, which is now trading at N325/$, the lowest point ever.
“This is happening even when the oil price is up at $31pb. The debate as on whether to devalue the naira is not the real issue. The discourse should be whether we need an exchange rate policy or not. The absence of a policy is a recipe for economic anarchy and a race to the bottom.”
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