At 318 to a dollar, naira hits new record low
The Nigerian stock exchange (NSE) was on the rise on Wednesday, as the naira fell to new record low of N318 to the dollar on the parallel market on Wednesday.
Demand for dollars continued to grow strong on the parallel market in the face of dwindling liquidity.
The stock index at the NSE climbed to 24,135 points for the first time in weeks, with the market capitalization rising to N8.3 trillion.
According to Reuters, the currency eased to 318 to the dollar on the parallel market, having closed at 312 on Tuesday.
At the official interbank window, the naira was stable around 197.
“We have demand coming from importers (paying) …their due obligations, while dollar supply has dried up,” said Aminu Gwadabe, head of the association of bureau de change operators.
The naira, which is currently at its lowest in 43 years, has been the subject of debate in Africa’s largest economy.
The International Monetary Fund (IMF), Muhammad Sanusi II, the former CBN governor and Emir of Kano, and many other economists are calling for devaluation of the naira.
President Muhammadu Buhari and the Central Bank of Nigeria have insisted that the naira will not be devalued, with Buhari saying he would not “murder” the currency.
The nation’s foreign reserves, however, lost $955 million in the past month, maintaining an 11-year-low, with little or no respite in sight.
If it is eventually decided that devaluation is the way to go, then we should be talking of successful devaluation. Its important that certain things be done for it to work. This is if and only if devaluation is decided upon.