Naira dips further at parallel market
The naira yesterday further depreciated against the dollar at the parallel market. The naira lost N1.50 to the dollar, as it was traded at N225.5 to the dollar at the market on Monday afternoon.
This is against the N224 to the dollar recorded last Friday.
The official interbank rate also dropped by 0.05 to N196.95 to the dollar.
Traders at the parallel market attributed the depreciation of the naira at the market to insufficient quantity of dollar at the market.
Meanwhile, Vice President Yemi Osinbajo has said the country will keep its restrictions on foreign currency for now in order to preserve foreign reserves amid plunging oil revenues.
Nigeria has restricted imports since June to offset a fall in vital oil revenues which has hit public finances and the naira.
But the Manufacturers Association of Nigeria has warned that some companies might be forced to close plants because they could no longer import raw materials or equipment for their production.
Osinbajo defended the restrictions, saying they had enabled the country’s foreign currency reserves to stabilize, but said they were only a short-term measure.
“We want an open foreign exchange market. But that market must be one that has the resources to make it robust and open,” he told reporters late on Saturday. “So, long term, we expect that the Central Bank will ease restrictions as we go along.”
“In fact, medium to longterm and hopefully we will be able to go back to more or less where there was greater freedom of movement (before) current restrictions,” he said.
Osinbajo also said Nigeria’s economic growth should pick up “a bit” in the next quarters, after halving in the second quarter year-on year, as power supplies had improved.
“We are well on the way to getting out of the worst part of where we are today,” he said, dismissing fears the country could slip into recession next year.
He also said there would be no exemption for state bodies to transfer revenues into a single account at the central bank, which is part of a drive to combat graft by President Muhammadu Buhari. Banks have complained the rule has sucked up liquidity.
Osinbajo said some institutions, such as oil firm NNPC, had initially sought an exemption but are now, at least, partially abiding by the rules.
“I know that even the NNPC has complied to a certain extent. I know that they may have some outstanding (revenues),” he said. “But the NNPC has definitely started to comply.” NAN/Reuters
Vice President Yemi Osinbajo