Naira may depreciate further this week

Following the reversal of foreign currency deposit ban by Central Bank of Nigeria, CBN, early last week, banks have reported that have recorded a near zero foreign currency deposit inflow from high net-worth individuals.

This has led to scarcity of foreign exchange in the market as well as the high exchange rate above N300/ USD1.

Analysts have made various recommendations aimed at battling the situation. Commenting on the situation, Afrinvest stated, “We will advice the Monetary authorities to articulate an integrated policy on foreign exchange management taking into consideration the fiscal policy objectives of the federal government.

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“We also think that CBN being the recipient and owner of 90% of the country’s foreign exchange earnings must evolve a channel for injecting dollar cash liquidity into the system, to meet legitimate needs”.

Also giving its prediction concerning the forex situation, Cowry Assets analysts stated, “this week we expect further depreciation of the Naira at the alternative market segments on aggravated supply scarcity buoyed by the closure of CBN’s window to BDCs”.

Nigeria’s economy has been on the spotlight following a recent fall in the price of crude oil all over the world.