The battered Naira will not be spared - Report

 • The local unit sold for N495 per dollar on the street on Thursday

 • The naira finished at N495.00, according to the statistics

 • As of Friday's closing of business, this corresponds to a margin of 16.80%

There are concerns that currency speculators and perpetrators of various acts of sabotage may continue to stall the Central Bank of Nigeria's (CBN) efforts to address the country's foreign exchange market liquidity issue.

After the Central Bank of Nigeria (CBN) depreciated the official currency rate by 7.6% and replaced it with the managed-float number used by investors and exporters, the naira depreciated on the parallel market.

According to abokifx.com, a website that compiles parallel rates in Lagos, the local unit sold for N495 per dollar on the street on Thursday, up from 486 on Monday. On the investors and exporters window, often known as NAFEX, the naira opened at N411.08.

According to analysts, the unregulated naira exchange rate movement is fueled by speculation based on the CBN's shift to NAFEX.

The local unit, on the other hand, remained constant in the parallel market, according to data from abokiFX.com. The naira finished at N495.00, according to the statistics, the same rate at which it traded with the hard currency in the previous session on Thursday.

The naira declined against the US dollar at the Investors and Exporters (I&E) window on the same Friday, according to statistics posted on the FMDQ Security Exchange, where forex is formally exchanged.

The native currency finished at N412.00 to the dollar at the NAFEX window, a 0.24 percent decline from the N411.00 it traded in the previous session on Thursday.

This was demonstrated by a 55.50 percent drop in foreign exchange supply, with $156.06 million traded versus $350.65 million in the previous session on Thursday.

According to the FMDQ statistics, the naira hit an intraday low of N430.00 and a high of N400.00. On May 21, the currency was last traded at N412.00.

As a result, the difference between black market and official market rates is currently N83.00. As of Friday's closing of business, this corresponds to a margin of 16.80%.

Once there is stability at the I&E window and people see there are no major moves and demand has not increased, then we will begin to see some form of convergence, Ayodeji Ebo, head of retail investment at Chapel Hill Denham, Lagos told an international medium.

On Monday, the CBN confirmed on its website that it has officially devalued the naira, with NAFEX forex window rate of N410.25 as its official exchange rate to the dollar, after it had removed N379/$ earlier in May.

Emefiele had said that the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria.

In order to adjust for the decrease in supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and now hovers around N410/$, Emefiele explained.

We need to enhance our local capacity to produce, we must be productive, said Barr Fred Nzeako, a development economist told Business Hallmark in a telephone interview.

This will not only create jobs, it will also reduce our foreign exchange consumption. And when foreign exchange consumption is reduced, the value of naira will shore up.

Nzeako believes it is lack of productivity that is driving scarcity of foreign exchange and this is leading to all forms of racketeering at the forex market.

The CBN had, in April 2017, established the I&E forex window as part of efforts to deepen the foreign exchange market and accommodate all forex obligations. The purpose of the window was to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

But the International Monetary Fund (IMF) has consistently called for the removal of foreign exchange restrictions, and a full exchange rate unification in line with the government's Economic Recovery and Growth Plan (ERGP), to help keep the parallel market premium low in a more sustained manner.

The Fund insisted that restrictions on access to foreign exchange for certain categories of goods, and multiple exchange rates create distortions in both private and public sectors' decision-making.

It also believes such restrictions discourage long-term investment, encourage smuggling, and provide avenues for corruption, while also constraining the economy’s ability to absorb external shocks.