Naira sinks to record low at N420 against dollar
The continued scarcity of foreign exchange on Wednesday pushed the naira to an all-time-low of 420 against the United States dollar at the parallel market.
The currency hit its low record the same day that data released by the National Bureau of Statistics showed that the economy was in recession.
Defying attempts by monetary authorities to reverse the slide, naira has continued to weaken in the parallel market. The CBN had on June 20 lifted its 16-month-old currency controls and auctioned about $4bn on the spot and futures market to clear a backlog of dollar demand, to help boost interbank market trading.
Some analysts expressed their concern about the possible effect of the NBS report as it give a negative image of the economy.
The NBS report showed that the GDP growth rate slid further from -0.36 per cent in the first quarter to -2.06 per cent with inflation rising to 17.1 per cent from 16.5 per cent.
It also showed that unemployment rate had increased to 13.3 percent from 12.1 per cent and that the investment inflows had dropped to the lowest levels at $647.1m from $710m.
The country’s foreign reserves have also witnessed a decline, further threatening the naira.
The President, National Association of Bureau de Change Operators of Nigeria, Aminu Gwadabe, told Reuters on Wednesday that depending on the effective implementation of the central banks’s policy, the appointment of new international money transfer operators will ensure that banks will have more dollars to sell to bureaux de change and provide the needed liquidity in the market.
The Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, said the NBS report had also indicated that the second half of the year would be better
Financial analysts have called on the Federal Government to declare a national emergency on the economy to avoid a situation where the current recession will result in a full-blown depression.
