Experts predict more woes for the naira

By CHIOMA OBINAGWAM

EXPERTS have said that the naira is likely to lose more grounds to the dollar in the parallel market as a result of the Central Bank restrictive policies on forex in the coming days.
Acting President of Association of Bureau De Change, Alhaji Aminu Gwadebe stated this in a telephone conversation with National Daily at the weekend.
“There’s a likelihood that it would crumble to N300 to a dollar. You can only control the currency if you have effective control of the imports in the country but the reverse is the case because we are a chronic import dependent economy,” he said.
According to him, the amount that the CBN makes available to Operators of BDC has reduced from $60,000 to $10,000, thereby creating a scarcity problems resulting to panic buying.
He cited reasons for the weakening naira to include unavailability, panic from the recent Bank Verification Number (BVN) exercise as well as stringent regulation on the naira. “When you put a lot of stringent regulation on naira that you don’t really have control on, it will definitely crumble.”
Alhaji Gwadabe called on the CBN to do engage in more in enlightening the public whenever new policies are rolled out.”My advice to the CBN is that they should do a lot of sensitisation on any new policy there are rolling. They should give enough time for the gestation period and the deadline,” he advised.
On his part, the President of the National Council of the Nigerian Stock Exchange (NSE), Aigboje Aig-Imoukhuede said that the cost of pegging the naira at certain rate is not helping the economy.
“The cost of trying to put your exchange rate at a particular level might out-weigh the benefits, especially in a country that is highly dependent on a single commodity-oil. By controlling the demand side of Forex you might be crippling the economy,” he said.
Reacting, the National President of Constance Shareholders’ Association of Nigeria, Shehu Mikail noted that most of the industries in the country are dependent on Forex, which has aggravated the scarcity.
Nevertheless, he does not agree to further devaluation of the naira as a substitute to the rationing of the Forex.
The CBN had rolled out a number policies aimed at strengthening the naira, in the face of the nation’s hemorrhaging external reserves which had dropped to as low as $28.96 billion as at January 5, 2016 compared to $34.52 billion recorded in December, 2014.
As at the time of filing in the report, dollar was sold for as high as N278 at the parallel market (black market), while the interbank rate remained unchanged at N199.41.