While the country’s central bank exchange rate has been comparatively lower, there have been increasing interest in the naira rate against the US dollar at the parallel market.
This is not surprising to those familiar with the currency exchange market. Most traders, travelers, or other business people consider the banks as a far more formal environment for regular people who may need the dollar or vice versa for one reason or the other.
Which is why there have been increasing attention paid to that non-formal (or illegal as some would it) but free market by the Central Bank as well as the Federal Government of Nigeria.
This heightened level of engagement of the informal currency market players earlier in the year had the Nigeria’s apex bank setting a fixed exchange rate for bureaus across the nation.
Furthermore the CBN had also earlier this month (June 2017), in collaboration with the Ministry of Finance (representing the Federal government) disclosed plans to issue Treasury bills aimed at mopping over N200 million from the market in order to stabilize the naira’s exchange rate against the US dollar.
Now at the end of the first half of the year, the Nigerian Naira is comfortably below 370 per US dollar with the latest parallel market rate selling at an average of N364 and N365 when buying and is expected to appreciate even more against its foreign counterpart in the following months.
One should actually add that, the President Buhari-led administration’s monetary policies are finally paying off, although the currency’s prevailing rates are significantly far from what many would consider the closing rate for his predecessor – President Good-luck Jonathan’s who had the worst at N195 per dollar; notably accompanied by a largely complaining business public.
However, before anyone politicizes this: there have been considerable legitimate arguments as regards the reasons behind these ballooning naira exchange rates against the US dollar witnessed over the last sixteen – eighteen months.
From global fall in crude oil prices, a financial system that was choked by corruption, among others: it’s been a ‘race for life’ with the nation’s economy for the now two year old administration and while the recovery is still far from perfect, the efforts are indeed commendable.
In addition, taking a more constructive view to these laudable development in Africa’s largest economy, one only hopes that whatever measures adopted to achieve this impressive results with the Naira are not merely to earn a short-lived political score on the economy (especially with the drums already rolled out ahead of the 2019 general elections).
Nigeria and its economic stakeholders from around the world sincerely hope that, the country’s Federal government is truly committed to sustainable measures that will guarantee long-term stability of the nation’s currency – the Naira as well as ones to facilitate lasting growth across all sectors of the economy.
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