Naira depreciated by 20% at parallel market last week

… As ABCON highlights factors to boost currency

The Nigerian currency, the Naira during the weekend closed at a disappointing rate of 394 to a dollar at the parallel market, indicating about 20 per cent depreciation within the week under review.

Nevertheless, the Association of Bureau De Change of Nigeria (ABCON) has highlighted factors that can quickly restore the naira gains at the unofficial segment of the forex market.

In our fact findings, we discovered that activities in the forex market last week began trading with a promising outlook for the naira, as it sustained strength against other currencies but started depreciating in the middle of the week and ended deeper northward on Friday to close N394 to a dollar.

This scenario occurred despite the CBN’s review of the rate during the week from N375 per dollar to N360 to a dollar and the removal of disparity in the applicable exchange rate between the BDCs rate of N381/$ bid rate and that of the banks/Travelex rate of N370 against the greenback.

The new onslaught on the naira by speculators and resistance of the banking industry and the CBN status of last minute solution as revealed recently is accounting for the naira misfortune in the market.

The naira closes for the week at a disappointing level of N394/$ at the parallel market. This translates to about 20 per cent naira depreciation within the week.

Speaking exclusively to Daily Times, ABCON President, Aminu Gwadabe, said the way forward as soon as possible is for the CBN to inject liquidity to BDCs subsector for effective unification of rates.

According to him, it is evident that injection of liquidity to the interbank market rather than the BDCs subsector is not effective and transparent for sustained FX rate convergence and unification.

“Statistics by the CBN revealed that about 20 banks received $80million dollars weekly for invisible transaction as against the $20million weekly for the over 3000 CBN licensed BDCs nationwide.

He noted that the apex lender should enhance public awareness to guide end users on availability and applicable exchange rates, while supervision and penalty for infraction on operators must be instilled.

Gwadabe pointed out that it is very important to diversify the nation’s buffers from oil proceeds to foreign investor’s inflows and Diaspora remittances.

His words: “The CBN should also sponsor bill for an act of the national assembly for naira convertibility in West Africa as naira is currently a means of exchange in about 15 countries in Africa.”

He believed that increase security surveillance would checkmate illegal foreign cash evacuation at various airports and boarders across the country.

Meanwhile, the nation’s external reserves fell to a two-week low as the naira eased on the black market, even though the apex lender had pledged to step up dollar sales.

The CBN has been selling the dollars on the official market in order to narrow the spread with the black market rate, which was quoted at a record low of N520 per dollar a month ago.

Forex traders estimate that the bank has sold more than $1bn in currency forwards since last month to boost liquidity.

The external reserves, which have risen by 16.1 per cent since the start of the year, stood at $30.29bn by March 29, but are still far off their peak of $64bn, hit in August 2008, the CBN data showed.

The International Monetary Fund on Thursday urged the Federal Government to lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates in order to revive the economy.

Meanwhile, a Medical expert has argued state and the federal governments to come up with a national screening scheme for cancer to address the increasing rate of the diseases in the country.

The expert, who is the proprietor of Laropheka Hospital in Effurun and a specialist in Cancer, Mrs. Mudiaga Idonor, lamented the prevalence cancer in Nigeria, saying that awareness campaign should be organized and urged government and individuals to find sustainable solution that would priorities prevention of the disease.

She said, expectations are that screening will lead to early detection of the disease and it will help the country to check the spread of the disease in the country thereby reducing yearly loses of the Life threatening disease.