CBN targets N200 per dollar parallel market rate
The Central Bank of Nigeria (CBN) is targeting a
N200 to dollar exchange rate in the parallel
market, The Nation has learnt.
The naira which yesterday traded at N330 to
dollar in the parallel market is expected to
appreciate speedily, as the impact of the CBN’s
measures to stabilise the currency volatility in
the parallel market begin to materialise.
President, Association of Bureau De Change
Operators of Nigeria (ABCON) said the N330
rate in the parallel market is an improvement
from last week’s rate when the naira exchanged
for N391 to dollar.
The strident calls by the IMF and some foreign
interest for Nigeria to devalue its currency and
the artificial spike in Forex rate created by
Bureau De Change operators appears to have
tanked. This has been linked to a complex and
integrated currency management approaches
deployed by the Central Bank of Nigeria (CBN).
According to a top source in the apex Bank, “The
aim of CBN is to ensure that the divergence
between the official and parallel rate does not
exceed N3, so we are looking at a parallel
market rate of N200/$ because the downward
trend in the pressure on the naira will be
sustained.
“The CBN has the capacity to sustain the
downward pressure and will deploy further
currency management initiatives, while
capitalising on fiscal policies of the federal
government to remain in support of non-
devaluation of the Naira. The current stand of
the federal government on Nigeria’s legal
tender is Non-Devaluation. It will be unwise for
anybody to be hoarding dollars because we can
assure you that naira appreciation is going to
trend upwards going forward.”
So far, the CBN in a bid to manage the pressure
on supply has deployed over $11.7billion to
support Agricultural Sector, SMEs,
manufacturers and others. This has reduced
patronage of black market by end-users and
has forced rent seekers to dump the greenback
thereby creating a dollar-glut in the black-
market.
The source noted that it has been observed that
most of the imports that were draining forex
resources have since found local substitutes
with attendant savings in forex and shortage of
demand for the greenback, which was fuelling
the pressure, this is also coming on the heels of
the CBN instruction to commercial banks to
publish allocation of forex to end-users. This
has in recent times ensured that the real sector
of the economy and genuine users for
education and medicals have been able to
access Forex at official rate.
Industry analysts have also described the
development as a game changer for majority of
local manufacturers in Nigeria. The
manufacturers acknowledged that the impact of
CBN policy on forex since, its inception has
more than doubled their productive capacity,
with attendant benefits in terms of expansion
to meet increasingly higher demands for their
products and services.
The Analysts said, “Conveniently, since the CBN
foreign exchange policy came into existence,
production capacity by local manufacturers has
increased from 50 per cent to 70 per cent. This
has impacted on their propensity to increase
exports with higher volumes which is expected
to also earn Nigeria commensurate higher
foreign exchange earnings.”
Speaking further, the analysts are of the
opinion that the policy has helped the local
manufacturers to realise the urgent need to
expand because of increasing demands for
their products.
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