Naira Crashes To N472 To $1, As Forex Scarcity Deepens

The Naira crashes against the world Forex market on Tuesday as it closed trade at N472 to a dollar at the parallel market as the foreign exchange scarcity persisted. Naira Crashes Against Dollar

The exchange was N44/$ in the parallel market in June but it has further crashed in July and operators have demanded the immediate unification of the multiple exchange rates in the country

A Senior Partner at Stransact Partners Regulatory and Technology, Ebens Joels said it is becoming more worrisome as the gap between the various exchange rates operating in Nigeria created arbitrage opportunities for highly connected individuals.
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He worried that some people did not need to work to make billions of naira because they could simply obtain the foreign currency at the official rate and sell on the black market.

Joels said,

“Some people are cleaning out of this situation. The spread between the black market and the official market is back to about N100 on a dollar.
“It is not that rate that is the issue right now. We need to move to a single unified exchange rate. For all you know, the naira may be underpriced artificially because of the quest to defend the naira.
“Using purchasing power parity, I believe the naira is underpriced and the so-called need to defend the naira by operating several tiers of the official exchange rate is part of the systematic theft of national resources going on as we speak.”

Business organisations in the country had expected the naira to depreciate further in the next few months, according to the CBN’s May 2020 Business Expectation Survey Report.

“Respondent firms expect the naira to depreciate in the current month, next month, next two months and appreciate in the next six months,” the CBN had stated in the report.

Photo Credit: Getty

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