Renowned economist and the CEO of Financial Derivatives Bismarck Rewane has explained why he believes Nigeria’s currency has been on a downward spiral over the last few months.
Naira – Nigeria’s currency – has dropped sharply against the dollar and others, exchanging for over N1,400 to the dollar in the parallel market.
But Rewane, a guest on Channels Television’s Politics Today on Monday night which was monitored by Africa Today News, New York, blamed the development on the low influx of forex among other factors.
“One is low supply – supply of dollars. When you have low dollars. Anytime the supply is short, the price increases,” he said, adding that there is also a “loss of confidence in the currency as a store of value”.
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According to him, the restrictions and exchange rate controls are also part of the factors leading to the fall of the currency..
In another report, the Central Bank of Nigeria (CBN) on Saturday said there is no plan to convert $30bn domiciliary deposits to naira.
Africa Today News, New York recalls that reports emerged in the media that Federal Government and the apex banks were considering the conversion of foreign currencies in domiciliary accounts of citizens to naira to stabilise Nigeria’s currency, which earlier this week recorded its worst performance in history.
However, the apex bank dismissed the report as “fake news” in a post on Saturday, urging the public to disregard such speculations.
“No plans to convert $30bn domiciliary deposits to naira. This news is fake!,” the post reads.
The apex bank’s reaction comes two days after it ordered Deposit Money Banks (DMBs) to sell their excess dollar stock latest February 1, 2024, as part of moves to stabilise the nation’s volatile exchange rate.