Unease as Naira Hits N434.75 at Investors Window
Naira has crossed the foreign exchange red line. A fresh devaluation is not farfetched as the Nigerian naira continues to lose value across the foreign exchange market despite a decision of the apex bank to support the local currency from free-falling.
On Monday, after climbing the resistance level first time since 2017 when the Investors and Exporters FX window was created for manufacturers, the naira depreciated heavily in today’s trading session by 0.8% to N434.75.
MarketForces Africa reported that the Central Bank of Nigeria (CBN) launched the Investors and Exporters FX window in 2017 to attend to perennial scarcity in the markets.
It was a transit from Nigeria’s local bank Form M targeted at improving foreign exchange market mechanisms, deepening market liquidity, and ensuring prompt execution and settlement of all foreign currencies transactions.
To ensure exporters take their earnings through the window, CBN introduces N65 rebates but this has not helped in stemming the naira from falling at the official window. READ: Brent Price Crossed $85 amidst Global Energy Crunch
In the parallel market, traders said a United States dollar goes for N702 on Monday. United States dollar has also gained strongly in the international market as the dollar index hit a 20-year high.
CBN is delaying inevitable, Kingsley Aigbe told MarketForces Africa in a chat. By consensus, Broadstreet analysts believe the local currency is overvalued. Despite agreeing to this, Godwin Emefiele, the CBN Governor has insisted that the naira will not be devalued.
While devaluation is not desirable for a growth-starved Nigerian economy with large numbers of poor citizens, foreign investors have maintained distance following an inability to repatriate their funds abroad. # Unease as Naira Hits N434.75 at Investors Window
