At the moment, no respite is in view concerning a
possible end to the issues plaguing the naira
The depreciation of the Naira in the
foreign has happened almost on a daily basis, with the current now put at 372
to a dollar.
Forex dealers attributed the issue to panic buying of the
dollar and other major international currencies by importers, individuals and
businessmen.
With the naira exchanging at 372 to
the dollar, the local currency has lost 20 per cent of its value at the
parallel market in the last 10 days, Punch says.
This has not changed the Central Bank
of Nigeria rate of N172per dollar.
A Stockbroker commented that, “Due
to the rapid decline of the naira’s value, some offshore investors are booking
profit and selling down their holdings.”
The situation has affected the stock
market value of some major companies in the country.
Shares in Dangote Cement fell
by 4.11 per cent; Ashaka Cement was down by four per cent, while Cement
Company of Northern Nigeria dropped by 8.89 per cent to drag the index down.
A forex dealer at the international
wing of the Murtala Muhammed Airport, Lagos, Mr. Saliu Mohammed, said the increasing demand for
the greenback was overwhelming the market.
Speaking concerning the matter, the
Managing Director, Cowry Assets Management Limited, Mr. Johnson Chukwu, said, “The CBN does not have
the forex to manage the exchange rate today. Unless we adjust the exchange
rate, things may continue to get worse. As it is today, the naira can no longer
be a store of value, going by the rate at which it is losing its value at the
parallel market.
“Most people are buying dollar to store their wealth. We cannot
ignore the parallel market because that is where most people are holding their
transactions. A timely intervention by the Ministry of Finance and the CBN to
give a clear guidance on how they intend to manage the exchange rate will save
the day.”
At the moment, no respite is in view
concerning a possible end to the issues plaguing the naira.
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