Acting President, Yemi Osinbajo, in a bid to reverse the downward slump of the Naira against the Dollar, has ordered the Central Bank Of Nigeria, CBN, to harmonize the forex market, in a bid to have an organized official exchange rate platform, for prospective buyers. The development, is coming at a time the CBN had been accused of having over five different windows, where customers source for forex which according to financial analysts, was responsible for the massive devaluation of the nation’s local currency. As at yesterday, Monday, January 30, the naira exchanged at N498 as against N512 exchanged to a dollar few days ago in the black market. According to Foreign exchange traders, the development is as a result of to relative scarcity of forex at the greenback market, as CBN is trying to harmonize the market in a bid to strengthen the naira. In the official market, the local currency closed at N305/dollar, the level it has traded since August last year. Meanwhile, the naira is expected to remain at N498/dollar at the parallel market (black market), as the CBN continues sales of the greenback, to Bureau De Change, BDC operators
”Confidence is gradually returning to the forex market as a result of improved foreign exchange reserves, dollar sales by international money transfer agents and the central bank assurance it will continue to support the local currency,” a trader told Reuters. As at last week Tuesday, the CBN said it would continue to provide hard currency, with priority given to manufacturing industries that need to import raw materials and spare parts. Presently, Economic and financial analysts are slightly divided over the outlook for the naira this year, following Osinbajo’s directive. While some are insisting that the federal government overhauls its forex policy, others are of the view that certain aspects should not be totally written off, but adjusted to meet international best practices. A Nigeria-based investment bank and research advisory firm, Afrinvest West Africa Limited, has predicted that the 2017 economic outlook, might force CBN to possibly devalue the naira from its current official exhange rate of 305/dollar to around 400/dollar.
“If you think about the monetary policy environment, we think that the CBN will be forced by the market to make a change. “Currently, the naira is pegged at 305/dollar; we see it moving towards 400/dollar by the end of the year,” the Group Managing Director, Afrinvest, Ike Chioke, said at a press conference announcing the firm’s economic outlook.
Economic expert and Chief Executive Officer of Cocosheen Nigeria Limited, Henry Boyo, had in his own submission said, if the CBN fails to review its monetary policy framework, the naira might crash to almost 1000/dollar, at the parallel market before year end.