No matter how much the Central Bank of Nigeria intervenes in the foreign exchange market, naira keeps depreciating gradually.
Financial experts recently recognized some reasons for the depreciation as on Wednesday, in Lagos, they told the News Agency of Nigeria that a single market rate, amongst others, was required to reverse the depreciation of Naira.
A financial expert and a BDC operator, Mr. Harrison Owoh, said the demands for foreign exchange by pilgrims were far surpassing the supply. He said they had to put pressure on the corresponding market for more, since the $2000 auctioned to pilgrims on subsidised rate appeared not to meet their needs.
The expert also said that the request for foreign exchange by pilgrims was putting the naira in strain.
The President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, said an outward reduction of the interbank market rate was having a negative impact on the naira.
Gwadabe stated that investors were uncomfortable with the prevailing multiple rates in the market, adding that assortment of rates could stimulate currency assumption and round falling. The ABCON chief urged the regulatory authorities to work towards achieving a single market rate.
A former Governor of the Central Bank of Nigeria, Prof. Charles Soludo, has advised the regulator to dump the multiple exchange rates in the country and adopt a single exchange rate system as this would put an end to the continuous pressure facing the local currency
NAN stated that the naira reverted into depreciation after several weeks of appreciation powered by the aggressive interferences of the CBN at the foreign exchange market.
The naira had exchanged between N360 and N365 to the dollar for about four months before it started depreciating, exchanging between N367 and N370 to a dollar at the parallel market.