Business 5 Reasons Why Naira is Depreciating Against Dollar

[ProfRem]

The CBN in recent months had injected dollars to the inter-bank and Bureau de Change foreign exchange market in its bid to sustain forex supply to different categories of users.

The Apex Bank auctioned $418 million at a marginal rate of N310 to a dollar, to airlines, agriculture, petroleum and raw materials sub sectors and also pegged currency rate for BTA, PTA and medical vacations.

Also, forex supply to the BDC was increased from 8,000 dollars per week to 10,000 dollars.

This translated to the appreciation of the Naira from an all time low of about N560 to a dollar, to N355 within two months.

Despite all these intervention, the naira is weakening against the US Dollar

Here are likely reasons why the currency keeps falling against major currencies at the parallel market:



1. Alleged hoarding of the greenback by commercial banks

2. BDC operators violating operating guidelines – such as selling price at the black market segment.

3. Insufficient supply to the BDC segments and other stakeholders.

4. Information and market speculations

5. Political interference on monetary affairs


The Naira now sells at N405 to a dollar in the parallel market

 

[akpan ufon]

So people have been directly affecting the depression

 

[akpan ufon]

Let God punish them

 

[Olaoluwa]

May God intervene

 

[ProfRem]

May God intervene

Amen... Mama Adeboye

 

[ProfRem]

Let God punish them

Hmm..Judicial officer

 

[Olaoluwa]

Amen... Mama Adeboye

Arch Bishop Remmyalex [emoji1] [emoji2] [emoji3]

 

[ugwu zoba]

Things are not getting any better in this country.

 

[ugwu zoba]

God, please forgive us and look down on us.

 

[Ihediwa D.C]

The most punitive reason for the dollar and Naira disparity is inaction of the Government of the day in promulgating a policy that will take us out of the recession or that will shower our export to earn more dollars in the nearer future. The absence of these policies drive the speculations and hoarding of the dollars and make the intervention of the CBN irrespective of the dollar amount floated very futile.