The naira continued its downward slide on the parallel market yesterday, dropping to N480/$1from N478/$1 on Thursday. Data obtained from “Abokifx,” a website that tracks forex rates on the parallel market, shows that after falling to N487 per dollar in late November, the naira appreciated to N465/$1 during the Christmas festivities.
It, however, resumed its downward trend a fortnight ago, dropping to between N475 and N478 per dollar, due to an uptick in economic activity. The naira was under pressure on the parallel market for most part of 2020 due to foreign exchange scarcity, occasioned by the slump in the price of oil (the commodity that accounts for about 90 per cent of Nigeria’s export earnings). As part of its efforts to defend the local currency, the Central Bank of Nigeria (CBN), has in the last one year introduced several measures aimed at conserving the forex reserves.
The apex bank, has also stepped up measures to ensure compliance with its forex regulations. Last week, it announced that all Nigerian exporters, who are yet to repatriate their export proceeds, will be prohibited from banking services with effect from January 31.
The regulator had, last year, instructed authorised dealers and exporters to only open forms M for letters of credit, bills for collection, and other forms of payment. Although analysts expect the naira to continue to weaken against the dollar this year, the country’s external reserves have been boosted by the recent increase in oil prices.
Saturday Telegraph’s analysis of the CBN’s forex reserves data shows that the reserves rose steadily from $34.825billion on December 17, 2020 to $35.356billion on December 30. As at January 27 the reserves stood at $36.4billion.