Dollar set for another crash as CBN releases fresh $180m

Efforts by Central Bank of Nigeria (CBN) in making available large amounts of forex to the market has led to the appreciation of the Naira by over N85 in less than one week across market segments.

And in keeping with its determination to increase liquidity in the foreign exchange market, bank on Monday released another $100m into the wholesale forwards segment of the market and pumped an additional $80m into the banks specifically for the settlement of dollar demand for school fees, medicals and Personal Travel Allowance (PTA), among others.

Already, there are speculations that the embattled naira may be on a permanent journey to its natural value put by some analysts at less than N300 to the dollar.

In a release by its spokesman, Isaac Okorafor, the CBN said that its commitment to providing enough forex for legitimate business remains unshaken, reiterating that it would do “everything possible” to ensure the steady supply of forex to the market.

The CBN had maintained that much of the dollar demand had been a bubble created by speculators and hoarders of the greenback. On a radio programme on Monday the apex bank had warned market players and keepers of dollars to make hay and sell their holdings in order to avoid heavy losses.

And some economic experts have blamed the high interest rate on the total dependence on importation to cater for the country’s basic needs.

Speaking at Refined Economic Development (RED) seminar organized by the Economic $ Business strategy (EBS) ltd in Abuja on Monday, Vice Chancellor of Veritas University, the Catholic University of Nigeria, Prof. Mike Kwanashie said Nigeria depend so much on foreign goods thereby robbing herself of internal financial flow that is needed to meet the demands of her people.

“If you want to bring interest rate down, you create the supply of capital to meet the demand capital”, he said noting that depending on importation has weakened the country’s strength to supply capital.

According to him, Nigeria is a consumer country which depends on others to produce the basic needs of her citizens thereby moving her finances to foreign nations at the detriment of her own financial sustainability which lacks the capacity to meet the demand capital from her citizens.

Also speaking at the seminar, former Governor of Cross River state, Donald Duke observed government needed to put money in the hands of the people.

“We need to develop our economy by ourselves, if you are selling things to other countries, we will save the dollar for the rainy day.

“We import everything, Nigeria is among the countries with the most imported items, if the government can even start producing some of these items now, and is able to sustain the production, gradually in the next five years the interest rate will be very low”, he explained.

Tasking Federal government on financial engineering, the rice merchant said “the political will to take certain economic decision is what the country needs, the problem of Nigeria is not resources but the application of these resources to meet the needs of her citizens” stated Donald.

An entrepreneur, Sa’adatu Abdullahi, in her contributions said Nigeria must develop business using local content as the way forward in reducing interest rate as using local content will make money go round in the hands of other Nigerians.

“Making use of what will have in this country by ourselves, being able to turn our natural minerals to refine products which we can sell in this country will put pressure on our financial institutions to sit up. But as it is, there is no money in the hands of Nigerians and so the banks are not ready lend”, Abdulahi concluded.

Host of the seminar, Magnus Kpakol stated that Nigeria needs financial salvation “Across Africa, from high unemployment to high interest rate is a manifestation of economic violence against the people”

He called on the Federal Government to invest more in the training of youths in skills acquisition as a way of making production skills available to help Nigeria become a production country.