CBN Tells Nigerians What to Do as Naira Loses Strength Against British Pound, Dollar
- The value of the British pound sterling is quickly approaching the dreaded N2,000/£1 level on the black market
- The value of the dollar has risen to a four-month high against the naira surpassing the N1,500/$ mark
- In response to the incident, the CBN advised calm and gave assurance that the naira is safe from further decline
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
With the US dollar at a four-month high, the value of the British pound sterling is rapidly approaching the feared N2,000/£1 threshold on the parallel market, trading at N1,964/£1.
Source: Getty Images
This increase comes after the Office for National Statistics announced a 0.4% growth in the UK GDP in May.
What Nigerians should do
The Central Bank of Nigeria (CBN), responding to the event, has urged composure and guaranteed that the worst is behind the naira.
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Despite the naira's current devaluation in the parallel market, CBN Governor Olayemi Cardoso stressed that recent advances in Nigeria's foreign exchange management had restored confidence in the currency.
The strength of the pound sterling has drawn interest from Nigerian companies and people who intend to visit the UK. The depreciation of the naira is accompanied by Nigeria's foreign reserves hitting a record high of $35.05 billion on July 8, 2024, under President Tinubu's presidency.
Daily Sun reported that the euro was trading at N1,677/€1, while the dollar was trading at N1,550/$1 in parallel market trade.
Speaking at the Business Day Media-organized CEO Forum 2024, Governor Cardoso gave assurances that the CBN is dedicated to market transparency and economic stability while tackling illegal flows and foreign exchange backlogs.
Experts point out that the CBN's remarks are intended to allay concerns in the market and emphasize its initiatives to stabilize the economy. They do, however, issue a warning that rising price volatility and exchange rate discrepancies are the results of the naira's decline.
In the view of Charles Abuede, a financial analyst, FG needs to work towards improving the social economic environment to improve FX inflow.
He said,
"If Nigeria can address insecurity and terrorism concerns, oil theft and pipeline vandalism, we can begin to see an increase in our crude oil production to above 2mbpd or even close to 2.5mbpd to aid the increase in fx receipt."
British Pound sells for new rate
Legit.ng reported that compared to the British Pound, the naira slipped towards the end of May, concluding the month at a loss.
Data available on the CBN website showed that the local currency lost a significant N353/£ to close at N1,877/£ on Thursday, May 30, from the N1,524/£ it closed the previous day, Wednesday, May 28.
Analysis showed that the naira, which started the month at N1,802/£, ended worse off at N1,877/£ despite the CBN’s action to drive the currency up.
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Source: Legit.ng
