A new report claims that the Nigerian currency, which hit an all-time low of 710 per dollar in late July, has rebounded as much as 10%. The Central Bank of Nigeria, which initially blamed speculators, said that importers who do not remit foreign exchange gains may have contributed to the naira’s depreciation.
Naira Falls
Less than two weeks after hitting an all-time low, the Nigerian currency recovered against the US dollar in a parallel market, closing at 640 to the dollar on August 3. This rebound represents a recovery of about 10% from the low of over 710 per dollar at the end of July.
Business Day magazine reports that increased dollar supply and cooling demand for the greenback contributed to the naira’s rebound (*21). But before the currency could recover, the naira’s sharp decline led the country’s lawmakers to seek answers from Central Bank of Nigeria (CBN) Governor Godwin Emefiele.
Governor Emefiele reportedly claimed before the lawmakers that while he had previously blamed speculators for the currency’s decline, the Nigerian National Petroleum Corporation (NNPC)’s failure to transfer money to its foreign reserves also contributed to the naira’s sharp fall. However, some local reportssay NNPC officials denythe CBN governor’s claims.
Meanwhile, Egboagwu Ezulu, the CBN Deputy Director General for Banking Operations, in a separate reportcited attacks on importers accusing them of dumping their foreign exchange earnings abroad. He said.
We were told to take our forex back home but we are taking it out of the country and dumping it. If Nigerians were to bring back forex, we would not be talking about the challenges of forex. There are challenges for individuals and companies to do the right thing.
Ezuru also argued that the CBN has introduced an incentive called RT200 as a way of facilitating the repatriation of foreign exchange earnings to Nigeria. The CBN deputy governor, however, claimed that the central bank has been exporting billions of dollars out of the country. According to Ezul, billions of dollars flowing out of the economy will inevitably put more pressure on the naira.
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