Naira Value Drops to a New Low as CBN Blames Nigerians, Withdraws Over $134m From Foreign Reserves

Naira Value Drops to a New Low as CBN Blames Nigerians, Withdraws Over $134m From Foreign Reserves

  • The Nigerian currency is experiencing one of its worst runs against the US dollar in the last few days
  • Naira's depreciation is coming on the back of increased demand by Nigerians for the foreign currency looking to travel out of the country and also import
  • To meet forex demands, CBN has been forced to withdraw over $134 million from Nigeria's foreign reserves

The last few days have been a tough one for Nigerian importers looking to get dollars from the official market.

On Wednesday, the exchange rate for Naira to the dollar depreciated again closing at N419.33 to a dollar.

Wednesday exchange rate according to data from FMDQ securities is the lowest in over 3 weeks of trading.

Naira, CBN, Foreign Reserves
Forex Exchange trader with a bunch of cash Credit: Pius Utomi Ekpei

CBN blames Nigerians on weak Naira

Meanwhile, the Central Bank of Nigeria (CBN) is not to be taking the devaluation of the Naira lightly.

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The Apex bank described Nigerians’ import dependency as the cause of the falling Naira while imploring Nigerians to adopt homemade products to boost Nigeria’s economy.

The feeling of the apex bank was disclosed by Osita Nwanisiobi, CBN Director of Corporate Communications at a two-day expo organized by the apex bank in Owerri, Imo State on Wednesday, The Vanguard reports.

He said, during the COVID-19 pandemic, the CBN’s Anchor Borrower’s program was the nation’s saving grace for improved rice availability. The actions, he added, were aimed at emancipating enterprises and eliminating poverty.

Nwanisiobi, who was represented by Mr Sam Okogbue, Deputy Director, Corporate Communications Department spoke on the topic of “Promoting Financial Stability and Economic Development,”

He noted that the CBN has implemented various interventions in the agricultural, manufacturing, and other sectors but Nigeria’s over-dependence on imports was one of the reasons for the currency’s depreciation.

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He said:

“No successful economy thrives on the promotion of imported products over the exportation of locally manufactured products.
“During the COVID-19 pandemic, rice was the most single popular component of our palliatives. This is a result of the CBN’s Anchor Borrower’s programme for rice farmers.”

External Reserves drops

Meanwhile, the Central Bank of Nigeria (CBN) has recorded its first withdrawal from Nigeria’s external reserves for the month of March 2022.

For the first 21 days of April, the external reserve was on a consistent increase adding over $273.7 million.

However, since on Friday last week, a total of $134 million has been removed from the reserves, and it now stands at $39.67 billion on 26 April 2022, compared to $39.81bn it started the month.

Naira to crash to N600 per dollar this season as eNaira app’s massive downloads continue

Meanwhile, has reported that while the e-Naira is seeing massive and impressive downloads, the actual Naira is eroding in the official market.

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On Monday, December 6, the actual Naira closed at N415 at the official Investors and Exports window.

The eNaira has seen commendable adoption after it was launched in October this year. But experts are not sure if those downloading the app are using it or keeping it for future use or for fun.


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