Naira Appreciates Again Against the Dollar
The Nigerian currency has been able to win some points over the week, thanks to some of the new policies put in place by the present administration of President Muhammadu Buhari to revive the nation’s currency. As at Friday, the 21st of August, the Nigerian currency had appreciated to N208 to the US dollars as obtainable in the parallel market.
The naira did not appreciate against the US dollars alone; it also gained some slight appreciation against the British pounds as well as the euro. Naira traded at N230 against the euro and traded at N330 against the British pound as at Friday. For quite a while now, the official interbank exchange rate for the naira against the US dollars had remained at the rate of N197.
Olufunke Adegbeye is a wealth manager and she had attributed the appreciation of the naira against the US dollars and other currencies like the euro and the British pounds to the devaluation being experienced globally by the United States dollars. She also linked it to the monetary policies that are recently set up by the Central Bank of Nigeria (CBN).
She looked into how the laws of demand and supply contributed to the whole naira appreciation issue and pointed out that the CBN’s policies have put some hold on the forces of demand and supply in Nigeria’s currency market, forcing the naira to rise against major world currencies.
Adegbeye went further to say that it would be a good idea if the CBN can put some restrain on its progress considering the possible impact this might have on business in Nigeria. She insisted that any rapid change or appreciation in the value of the naira will have some negative impacts on business in Nigeria.
She added that the common businessman on the street should be fully taken into consideration while the CBN is making its policies. She insisted that failure to do so will lead to economic collapse that will have long lasting negative impact. She hinted that many of the manufacturers in Nigeria are still fully dependent on imported raw materials and that any rapid rise in naira value will hinder their business.
She noted that the policy the CBN has adopted on foreign exchange restriction is already having some negative impact on manufacturers and warned that any further restriction or stringent condition would further make life very unlivable for them and that life could only get worse.
She insisted that the new policy being embarked upon by the CBN concerning foreign currency restriction is already forcing some desperate businessmen to smuggle foreign currencies across the border since they need these for their businesses. She therefore advised that the CBN should closely look into the needs of the common man on the street, who may depend on such foreign currencies for business transaction so that government effort would not end up crippling the economy.
The new restriction on the use of foreign currency by the CBN is in line with the promise of the new administration of Muhammadu Buhari, who promised to make the naira to have equal value as the US dollars.