273 Views

Naira remains under pressure

Economic and currency analysts expect the naira to remain under pressure at the parallel market this week even as the Monetary Policy Committee of the Central Bank of Nigeria meets on Thursday and Friday to take key decisions on the economy.

The MPC will review developments in the global and domestic economic environment since its last meeting held on May 18 and 19, 2015.

The meeting is coming against the backdrop of incessant pressure on the naira-dollar exchange rate, creeping inflation and slowing Gross Domestic Product growth rate.

The naira traded at 241.5 per dollar at the street market on Thursday, up from 235 to the dollar the previous week.

The forex markets, which closed for public holiday on Friday, will be further closed on Monday (today).

The naira has been under persistent pressure since the CBN stopped forex sales to importers of 41 items last month.

“Dollar supply remains weak in the market, yet demand is rising daily,” one dealer at the parallel market told Reuters.

On the interbank market where the CBN exerts tight control, the naira is trading in a narrow margin.

It held at 196.95 to the dollar at the interbank rate on Thursday.

Foreign exchange dealers, however, expect the MPC or the CBN to come up with a policy to stabilise the naira this week, although the central bank had said it was not bothered about rates at the thinly traded black market.

“We expect the central bank to make some statement on the forex exchange market at its Monetary Policy Committee meeting this week,” said a trader at a commercial bank.

The National President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said the association expected the CBN would come up with policy to stabilise the naira this week.

Already, he said the association had warned its members against speculative activities, adding that the CBN had restated its resolve not tolerate such.

He said at the naira had gained some momentum, rising from 241 to 237 against the greenback. This, he said, followed some of the recent moves by the central bank.

ALSO READ  Naira Gains Strength...... See Today's Naira Value At The Black Market

Gwadabe, however, said the recent CBN policy demanding BDC operators to collect prospective customers’ Bank Verification Number before selling forex to them was premature.

According to him, the central bank needs to give BDCs time before implementing the policy. He said the association was presenting a position paper on the matter to the CBN.

The Head, Investment Research, Afrinvest West Africa, a research and investment advisory firm, Mr. Ayodeji Ebo, and his team, expects the MPC to take decisions in the meeting on Friday.

In its report on the MPC meeting, the team said, “Recent developments in the money market will also not escape the sight of the MPC. The market is currently awash with speculative naira liquidity due to the recent state bailout fund released by the Federal Government.

“On the back of the foregoing, MPC will need to deliberate on alternative methods of stabilising FX and restoring confidence in the capital market without leading to a run on the external reserves. While we have suggested floating of the naira and establishment of a futures market in our recent publication, we observed the CBN seems to be averse to this.

“Hence, we imagine the MPC decision favouring one of the following possible scenarios: Leave all policy rates unchanged and continue to adopt administrative measures to curb naira volatility while rebuilding external reserves; or increase the naira intervention rate in the Interbank market and raise Cash Reserve Requirements to 35 per cent to reduce naira liquidity that could spur FX speculation; or increase Monetary Policy Rate by 50bps to attract Foreign Portfolio Investment while subsequently loosening restrictions on FX trading.

“We place a 70 per cent probability on scenario one, 20 per cent probability on scenario two and 10 per cent on the third scenario.”

 

Get the best viral stories straight into your inbox!

Don't worry, we don't spam

Leave a Comment

Your email address will not be published.

Latest Posts

Photos Of Multi-Billion Naira Ultra-Modern Deeper Life Church Auditorium Just Completed In Lagos
Religion
74 views
Religion
74 views

Photos Of Multi-Billion Naira Ultra-Modern Deeper Life Church Auditorium Just Completed In Lagos

MT - April 26, 2018

The new Deeper Life multi-billion naira ultra-modern church auditorium which reportedly gulped about N5 billion has been commissioned. The 30,000 capacity church located in Gbagada area of…

#LazyYouths: Bauchi Residents Match Out in Numbers to Welcome President Buhari on a 2-Day Working Visit
Politics
80 views
Politics
80 views

#LazyYouths: Bauchi Residents Match Out in Numbers to Welcome President Buhari on a 2-Day Working Visit

MT - April 26, 2018

President Buhari is in Bauchi state on a 2-day working visit. Residents of the state including children, filed out in their numbers to welcome him.

‘Legbegbe’ Star, Mr Real ‘Signs’ Deal With Sony Music Africa
Entertainment
70 views
Entertainment
70 views

‘Legbegbe’ Star, Mr Real ‘Signs’ Deal With Sony Music Africa

PH - April 26, 2018

Mr Real, the artiste behind the commercially successful ‘Legbegbe’, has signed a deal with Sony Music Entertainment Africa. The entertainment company made the development known in a…

D’banj’s CREAM Hits ‘3.5m Subscribers’
Entertainment
64 views
Entertainment
64 views

D’banj’s CREAM Hits ‘3.5m Subscribers’

PH - April 26, 2018

Dbanj on Wednesday said his Creative, Reality, Entertainment, Arts and Music (CREAM) platform has hit 3.5 million subscribers. CREAM, a platform which provides upcoming artistes the opportunity…

WATCH: Banky W Talks About EME and Why He Featured Adesua Etomi on His Song
Entertainment
70 views
Entertainment
70 views

WATCH: Banky W Talks About EME and Why He Featured Adesua Etomi on His Song

PH - April 26, 2018

Singer Banky W was on Hip TV recently to discuss a myriad of topics including the 2019 elections and why he featured his wife Adesua Etomi on…

WATCH: Toke Makinwa Opens up About Struggle with Fibroid and Recent Surgery
Entertainment
78 views
Entertainment
78 views

WATCH: Toke Makinwa Opens up About Struggle with Fibroid and Recent Surgery

PH - April 26, 2018

Watch this week’s episode of Toke Makinwa‘s Toke Moments as the author and media personality opens up on her struggle with Fibroids, her recent surgery and her…

Mikel Obi Speaks Ahead Of Super Eagles’ Clash With England
Sports
118 views
Sports
118 views

Mikel Obi Speaks Ahead Of Super Eagles’ Clash With England

MT - April 25, 2018

John Mikel Obi says the Super Eagles will put their best foot forward during the international friendly match against the Three Lions of England. The game is…

Like Cee-C, Nina Also Gets iPhone X, Hair and Cash Gifts from Tonto Dikeh and Bobrisky
Entertainment
103 views
Entertainment
103 views

Like Cee-C, Nina Also Gets iPhone X, Hair and Cash Gifts from Tonto Dikeh and Bobrisky

MT - April 25, 2018

Nollywood actress Tonto Dikeh has heightened her social media beef with singer and Instagram influencer, Tunde Ednut. This is coming after Tunde Ednut mocked a video shared…

Revealed: How Korede Bello Paid For His Distinction Results From Nigerian Institute Of Journalism
Entertainment
104 views
Entertainment
104 views

Revealed: How Korede Bello Paid For His Distinction Results From Nigerian Institute Of Journalism

MT - April 25, 2018

Mavin artiste, Korede Bello who graduated from the Nigerian Institute of Journalism with a distinction in Mass Communication (HND),just four days ago has explained in details how…

A Look At The Lagos Slum Where Land Is Allocated At N2k And Residents Live In Dirt
Shocking
109 views
Shocking
109 views

A Look At The Lagos Slum Where Land Is Allocated At N2k And Residents Live In Dirt

MT - April 25, 2018

Life at Mosquito village, a slum in Lagos state, is disgusting, brutal, weird, ephemeral, yet entertaining. The residents live in the cozy embrace of the filth surrounding…

SEE What Eating Dark Chocolate Does To Your Memory And Immunity – New Study
Best of Nigeria
101 views
Best of Nigeria
101 views

SEE What Eating Dark Chocolate Does To Your Memory And Immunity – New Study

MT - April 25, 2018

A new research showed that consuming dark chocolate with a high concentration of cacao has positive effects on stress levels, inflammation, mood, memory and immunity. Presented on…

PHOTOS: This Is How Nigerian Singer, D’banj Is Living Like A King In Dubai
Best of Nigeria
122 views
Best of Nigeria
122 views

PHOTOS: This Is How Nigerian Singer, D’banj Is Living Like A King In Dubai

MT - April 25, 2018

Without a shadow of doubt, D’banj is one artist who qualifies to be described as famous and rich. He also has so much style, so when he…

G-Worldwide Entertainment Unveils 2 New Artists, Easy Jay and Ajura
Entertainment
93 views
Entertainment
93 views

G-Worldwide Entertainment Unveils 2 New Artists, Easy Jay and Ajura

PH - April 25, 2018

G-Worldwide has just announced the latest additions to their rosters; Easy Jay and Ajura. The records Head of Artist Management, Louiza Williams said: We are thrilled to…

Why I Escaped From Police – Senator Melaye
Politics
111 views
Politics
111 views

Why I Escaped From Police – Senator Melaye

PH - April 25, 2018

Senator Dino Melaye has said that he jumped down from a moving police vehicle, which resulted in his hospitalization on Tuesday to prevent being taken to Lokoja,…

WATCH: DJ Neptune talks on his Challenges and Success Story on EbonyLife TV’s “EL Now”
Entertainment
93 views
Entertainment
93 views

WATCH: DJ Neptune talks on his Challenges and Success Story on EbonyLife TV’s “EL Now”

PH - April 25, 2018

In the new episode of EbonyLife TV‘s EL NOW, the talented DJ Neptune discusses the trials and challenges that he has encountered on his journey to becoming…

Singer Korede Bello Bags Degree from Nigerian Institute of Journalism
Entertainment
115 views
Entertainment
115 views

Singer Korede Bello Bags Degree from Nigerian Institute of Journalism

PH - April 25, 2018

Mavins record act, Korede Bello is proof that if you set you mind to achieve a certain goal, nothing can hold you back. In a post on…

Drums Festival Generated Lots Of Income For The Government – Governor Amosun
Art, History and Culture
113 views
Art, History and Culture
113 views

Drums Festival Generated Lots Of Income For The Government – Governor Amosun

PH - April 25, 2018

The Governor of Ogun State, Ibikunle Amosun has stated that the just concluded Africa Drums Festival hosted by the state, generated a lot of income for both…

I Sat For UTME Six Times – 26-year-old First Class Graduate
Geeky & Smart
109 views
Geeky & Smart
109 views

I Sat For UTME Six Times – 26-year-old First Class Graduate

PH - April 25, 2018

A 26 year old first class graduate of the Department of Applied Chemistry, Usman Danfodiyo University, Sokoto, Simon Godwin Idoko, has opened up on how he was…

Loading...