Nigerian Naira drops to N446 to $1 USD as calls for currency adjustment heightens | AfriTV Online

The Nigerian naira so far this week has continued to further depreciate against the US dollar due to continuous shrinking forex liquidity. The ever-continuous outflow of the dollar from Nigeria in recent months has adversely affected its foreign reserv...

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Nigerian Naira drops to N446 to $1 USD as calls for currency adjustment heightens

Published by: Tobillionaire
05/14/2020 11:01 AM

The Nigerian naira so far this week has continued to further depreciate against the US dollar due to continuous shrinking forex liquidity. The ever-continuous outflow of the dollar from Nigeria in recent months has adversely affected its foreign reserve, causing it to spiral down to $34.66 billion according to recent data obtained from the Nigerian Central Bank’s website.

The Naira recently depreciated against the US dollar at an all time high pace in the forward market, falling to N570/$1 from N413/$1 with a 5 years non-deliverable forwards, despite the Central Bank claiming it has sufficient dollars in its coffers to meet demands. However pundits are of the opinion that the value of the Naira be readjusted, believing that devaluation of the nation’s currency would hike the cost of importation and encourage exportation of locally produced goods, which in the long run would increase dollar inflow to the country and then re-strengthen the Naira.

Financial experts have further advised the Nigerian Central Bank to implement trade policies that would increase tariffs on luxury imported goods and give subsidies to local manufacturers who export their products. They also recommended the reduction of the current monetary policy rate to help stimulate the real economy and stall stagflation— a process whereby persistent high inflation combines with a high unemployment rate and stagnates economic output.

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