Naira Tumbles to 490 as Dollar Shortage Continues
TVC NEWS
The naira tumbled against the United States dollar to 490 on Monday from 487 on Friday, as acute shortage of the greenback continued to batter the economy and the country’s foreign exchange markets.
Before falling to 487 on Friday, the local currency had consecutively closed flat at 485 for four days last week.
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 brought untold hardships to Nigerians.
Economic and financial experts said unless the lingering dollar supply problem was abated, the volatility in the exchange rate and the consequent economic challenges might be endless.
“The challenge with the forex market is still the supply issue; price (exchange rate) is determined by the interplay of demand and supply,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had said.
According to the Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, the Federal Government needs to access an emergency lifeline of about $10bn from the International Monetary Fund to stabilise the exchange rate and restore investor confidence to the financial markets.
Economic and financial experts expect the naira to weaken further against the dollar as the Christmas holiday begins this week.
They also argued that the crackdown on the parallel market forex traders and the persistent scarcity of the greenback would make further weakening of the local currency inevitable.
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 over a week.
The naira had plunged to 470, down from 455 on the back of a fresh dollar shortage at the official and parallel forex markets.
The CBN has struggled to support the naira as the country’s external reserves continue to fall.
The naira tumbled against the United States dollar to 490 on Monday from 487 on Friday, as acute shortage of the greenback continued to batter the economy and the country’s foreign exchange markets.
Before falling to 487 on Friday, the local currency had consecutively closed flat at 485 for four days last week.
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 brought untold hardships to Nigerians.
Economic and financial experts said unless the lingering dollar supply problem was abated, the volatility in the exchange rate and the consequent economic challenges might be endless.
“The challenge with the forex market is still the supply issue; price (exchange rate) is determined by the interplay of demand and supply,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had said.
According to the Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, the Federal Government needs to access an emergency lifeline of about $10bn from the International Monetary Fund to stabilise the exchange rate and restore investor confidence to the financial markets.
Economic and financial experts expect the naira to weaken further against the dollar as the Christmas holiday begins this week.
They also argued that the crackdown on the parallel market forex traders and the persistent scarcity of the greenback would make further weakening of the local currency inevitable.
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 over a week.
The naira had plunged to 470, down from 455 on the back of a fresh dollar shortage at the official and parallel forex markets.
The CBN has struggled to support the naira as the country’s external reserves continue to fall.
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