Business
CBN May Lose Control Of The Naira
Published
2 years agoon
By
Editor
While the government appeared distracted with the coup in Niger Republic, the naira plunged further in the foreign exchange markets last week, exchanging at a record high of N955 to US$1 on Thursday, and spreading panic through the business community and apprehension among Nigerians. President Bola Tinubu and the Central Bank of Nigeria need to move fast, creatively, and pragmatically to avoid losing control of the currency and the economy.
The omens are bad. Since Tinubu pushed the CBN to merge the exchange rates two months ago, the naira’s southward descent has accelerated. The twin goals of facilitating a “realistic” rate, and eliminating the wide arbitrage gap created between official rates and informal market rates have remained elusive. At the official exchange rate of N767.76/$, the gap, and hence, room for illegal arbitrage, raced from N100/$ towards N200/$.
Absent an economic management team, direction, or cabinet, and no accompanying reforms of the regulatory agencies, all colliding with high inflation and business contraction, the naira is on track to crest the N1,000/$ mark and beyond soon, raising real fears that the CBN could lose control with dire consequences. The IMF added to the anxiety last week, saying existing “loose fiscal and monetary policies” make it difficult for the naira to stabilise.
READ ALSO: Naira Slides Further As Dollar Shortage Hits Banks
Wale Edun, Tinubu’s longtime economic adviser and ministerial nominee, signposted N700/$ as the realistic rate, saying the higher rates are not backed by the fundamentals of the economy. The Economist Intelligence Unit’s forecast of a N1,000/$ rate up till 2027 now appear overly optimistic. Things could get really nasty well before then.
This is not surprising. Supply is constrained by low non-oil export earnings. Demand is artificial, driven by speculators and hoarders, and massive, unchecked money laundering by state and non-state actors. Politicians, public office holders, bandits, kidnappers, and connected contractors, facilitated by lax oversight of the deposit money banks and the bureaux de change, are driving the market with ill-gotten naira, not producers or genuine commercial enterprises.
Tinubu must shift from his unfocussed, ill-planned, and uncoordinated decisions to strategic, well-planned, and comprehensive economic policies. He desperately needs an EMT and more economists and technocrats on board than the motley politicians he has nominated as ministers.
To avoid losing control of the naira and hyperinflation, the CBN should for a few weeks, fund the forex market; next, restrain the BDCs and errant banks from round-tripping and illegal arbitrage. There should be closer collaboration with other regulatory agencies, and the anti-corruption and law enforcement agencies to monitor operators and swiftly and firmly punish infractions and offenders.
READ ALSO: CBN Speaks On Phasing Out Old Naira Notes
An economy battling high unemployment, inflation, production contraction, and dwindling public revenues, needs strong stimulus to achieve recovery. These should target protecting strategic sectors – agricultural production, pharmaceuticals, transportation, and small businesses. Special attention should be paid to SMEs; how to subsidise their power supply, access to low-interest credit, and overthrow crippling taxes and levies.
Hard decisions lie ahead, but should be taken only after rigorous diagnoses and preparation. Shortage of dollars is leaving supply to the market in the hands of black-market operators, thereby effectively subverting the goal of reducing the gap between the official Importers and Exporters window and the parallel market rates. A temporary bolstering of the market to defend the naira for a very short period and funnelled to legitimate businesses is desirable to halt the naira’s downward spiral.
The economy requires very close attention and rigorous planning to avoid a collapse: Tinubu should, going forward, stop taking hasty measures without them.
PUNCH
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The Nigerian National Petroleum Company Limited, NNPCL, has increased the pump price of premium motor spirit across its retail outlets.
It was gathered that NNPCL retail outlets in Abuja have adjusted their fuel pump price to N955 per litre from N890.
This is the case in NNPCL retail outlets along Kubwa Expressway, Wuse and other parts of Abuja.
READ ALSO:Fuel Station Manager, Three Others Arrested For Robbery
Similarly, the pump price hike has been implemented at filling stations in Kogi and Nasarawa.
This means that the petrol pump price was increased by N65.
This comes after independent petroleum product marketers and filling station owners in Abuja increased petrol pump prices to between N950 and N971 per litre at the weekend. Their decision followed an upward review of the ex-depot petrol price by Dangote Refinery to N858 per litre, up from N820.
Business
Naira Appreciates Against Dollar As External Reserves Swell
Published
2 days agoon
August 5, 2025By
Editor
The naira appreciated against the dollar at the official foreign exchange market on Monday to begin the week on a bullish note amid swelling external reserves.
According to the Central Bank of Nigeria’s exchange data, the naira appreciated to N1,531.95 against the dollar on Monday from N1,533.74 traded last week Friday.
READ ALSO:Naira Continues To Appreciate Against Dollar On Official Market
This showed that the Naira strengthened by N1.79 when compared to the N1,533.74 exchanged at the close of work last week.
Meanwhile, at the black market, the naira remained stable at N1560 per litre, the same exchange rate traded on Friday.
The development comes as Nigeria’s external reserves had maintained a modest rise to $39.54 billion as of August 1st, 2025, up from $39.36 billion on July 30th.
Business
Naira Continues To Appreciate Against Dollar On Official Market
Published
5 days agoon
August 1, 2025By
Editor
The naira continued its appreciation against the dollar at the foreign exchange market on Tuesday.
Accordingly, the naira strengthened further to N1,533.18 against the dollar on Tuesday, from N1,534.21 traded the previous day.
This represents a gain of N1.03 against the dollar on a day-to-day basis and marks the second consecutive day of appreciation at the official FX market.
READ ALSO:Woman Arrested For Killing, Selling Pregnant Nurse’s Body Parts
Meanwhile, on the black market, the naira depreciated further to N1,545 per dollar on Tuesday from N1,537 traded on Monday.
Recall that the naira had similarly closed Monday’s trading session with mixed sentiments, recording gains at the official market but depreciating at the parallel market.
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