Naira Welcome Back: Gains N60 Against Dollar By kennedy Obue
The close of business on Tuesday this week, the Nigeria’s local currency, the Naira staged a comeback. The Naira gained over N60 against the dollar, closing at N310 as against the N375 it recorded against the dollar on Monday.
The Naira had fallen to an all-time low of about N400 to a dollar on the parallel market last week thereby fueling a geometric increase in the prices of goods and services in Nigeria, whose minimum salary wages of her workforce is pegged at =N=18,000 most government ministries and agencies are struggling to pay and other concerns that it would plummet further to N500 this week, but it defied all odds yesterday, climbing as high as N310 to the dollar.
Experts attributed the significant gain on the excess supply of the dollar in the parallel market. “There have been inflows into the market in recent days; the central bank and oil companies have been selling dollars,” a forex dealer at Apapa in Lagos, Alhaji Saliu Mustapha, said. Kunle Ezun, an analyst with Ecobank predicted that the Naira would edge higher in the coming days, adding that what happened last week was purely a speculative attack. “some people felt that if they pushed the Naira down to that level, they could force the CBN to devalue the Naira, so that when the Naira is devalued and the gap widens further, they would now bring out the dollar cash to make a kill” Ezun said.
He however urged the fiscal authorities to introduce policies that would help stimulate economic activities, saying that the fundamentals of the economy were still weak. Speaking on the issue, Chairman of the Association of Bureau De Change Operators of Nigeria, Alhaji Aminu Gwadebe said the market was moving from perception to reality. He said ABCON is in total support of the federal government’s stance not to devalue the Naira, adding that devaluing the Naira would create more problems than it would solve.