“It Is Important”: Naira Plunges to N850/$ As Forex Demand Sparks Concern, CBN Urged To Begin Investigation
- The Nigerian currency, the Naira, continues to lose its value against foreign currencies across different forex exchange segments
- Naira's depreciation has been attributed to the rising demand for the dollar; however, the CEO of CPPE, Muda Yusuf is not entirely convinced on what is going on
- In an exclusive interview with legit.ng, Yusuf expressed his convinced that there is need for the CBN to investigate forex market demands
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Dr Muda Yusuf the Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPEE) has called on the Central Bank of Nigeria to investigate the rising forex demand in the country amid continuous depreciation of Naira.
Speaking exclusively to Legit.ng, Yusuf explained that it is important that the CBN begins to interrogate the demands for forex and ensure it is not driven by capital flights or money laundering.
Source: UGC
His words:
"While it is clear that during the leadership of former CBN governor, Godwin Emefiele the various policies implemented created a backlog of forex, matured obligation and this has been unleashed since naira float.
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"Typically this put pressure on the forex market and create a sharp depreciation on the exchange rate
"It is however important that the CBN vet some of these demands, to be sure it is not capital flights or money laundering playing out.
The former Lagos Chamber of Commerce and Industry (LCCI) director general also asked the CBN to create a framework and intervene when necessary.
" I am a strong advocate of the current forex free market decision, but it is also important that the CBN develop a framework is developed and ensure that it intervenes when necessary.
"It is important to do it; we cannot afford to leave the market to the forces of demand and supply there should be a framework for intervention."
Naira to dollar exchange rate
Yusuf's comments are coming amid continued forex shortages and the further widening disparity of rates across windows.
FMDQ securities reports that at the Investors and Exporters (I&E) segment the official foreign exchange (FX) market, the naira exchanged at N768.16/$1 on Thursday, July 20.
However, in the unofficial markets, specifically the Peer-2-Peer (P2P) and the black market, the naira exchanged at N850/$1 and N855/$1, respectively.
CBN faces another headache as Nigeria’s foreign reserves fall to 2-year low
Meanwhile in another report, Legit.ng revealed that Nigeria's foreign reserves is now at a two year low.
The latest data from the CBN shows that Nigeria's reserves drop to $33 billion amid reduced earnings from crude oil sales.
The foreign reserves is a key firepower for CBN in its fight to ensure naira stay strong against other currencies.
Source: Legit.ng
