After touching a new all-time low of N710 against the dollar in late July, a new report says the Nigerian currency has rebounded as much as 10%. After initially blaming speculators, the Central Bank of Nigeria said that importers who fail to remit forex profits may contribute to the devaluation of the naira.
light of depreciation
Less than two weeks after dropping to a new all-time low, the Nigerian currency recovered against the US dollar in the parallel market and went on to close trading at N640 per dollar on August 3. This rebound marks a roughly 10% recovery from the currency’s low in late July at more than N710 per dollar.
according to working day Report, An increase in the supply of dollars, as well as a decrease in the demand for dollars, contributed to the recovery of the naira. However, before the currency recovered, the rapid devaluation of Nigeria’s currency prompted the country’s lawmakers to seek answers from Central Bank of Nigeria (CBN) Governor Godwin Emviel.
During his appearance before lawmakers, Emviel, who had previously blamed speculators for causing the currency’s decline, was reported to have claimed The failure of the Nigerian National Petroleum Corporation (NNPC) to transfer funds to foreign reserves also contributed to the declining naira. However, some local reports have quoted NNPC officials have dismissed the CBN governor’s allegations.
Meanwhile, Egboagwu Ezulu, CBN’s Deputy Director of Banking Services quoted In another report he attacked importers, whom he accused of dumping foreign exchange earnings abroad. He said:
We take foreign currency [forex] outside this country and dumping abroad; When he asked us to return them. If Nigerians are giving back foreign currency, we will not talk about foreign exchange challenges. There is a challenge for individuals and companies to do the right thing.
Izulu also argued that the CBN introduced an incentive known as the RT200 as a way to encourage the return of foreign exchange earnings to Nigeria. However, the deputy director of CBN claimed that the central bank is seeing billions of dollars being exported out of the country. According to Ezulu, when billions of dollars are taken out of the economy, this inevitably leads to increased pressure on the naira.
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