The naira is likely to remain stable against the dollar on the parallel market this week due to forex inflows occasioned by Central Bank of Nigeria (CBN)’s “Naira 4 dollar” scheme, analysts at leading forex broker, AZA, have said.
In a note obtained by New Telegraph at the weekend, the analysts said: “The naira strengthened on the parallel market, trading in the 478/485 to the dollar range vs. 482/486 at the end of last week, while depreciating on the official NAFEX window, from N408.67 to 411 amid accumulated demand for dollars carried over from the long Easter break.
“We expect naira to remain stable on the parallel market, hovering around the 480 to 490 level, as the Central Bank of Nigeria’s ‘N5 for $1’ incentive scheme encourages FX flows to go through banks. We see trading on the NAFEX window extending depreciation towards 435 in the short term.”
The CBN’s “naira 4 dollar scheme,” which commenced on March 8 and is scheduled to end on May 8, 2021, sees the apex bank paying beneficiaries of diaspora remittances, who receive funds through licensed International Money Transfer Operators (IMTOs), N5 for every $1 received as remittances inflow.
According to CBN, the initiative is aimed at checking round tripping and providing Nigerians in the Diaspora with cheaper and more convenient ways of sending remittances to their loved ones, friends and associates in the country.
The scheme is also aimed at boosting remittance inflows into the country, thereby leading to an increase in the nation’s external reserves and enhancing exchange rate stability.