The currency exchange rates for today, September 23, 2016

Naira may hit 500 per dollar – Obiano

The Anambra State Governor, Chief Willie Obiano, has said that the naira will continue to fall against the dollar till it reach N500 to the greenback.

Obiano said this during the commencement of the Anambra State Fire and Safety Summit in Awka on Wednesday.

The governor, who expressed fear that the dollar would continue to rise against the naira, said it would take no fewer than 18 months for the economic downturn in the country to subside.

He said, “People should embrace risk management. That is the solution to disaster, especially in a recession.

“No recession lasts less than 18 months, so we need to wake up. The naira is moving to N500 per dollar.

“We need to secure our certificates and other valuables of ours so that nothing will happen to them overnight. That’s the way to survive in a recession.”

These are the currency exchange rates for today, September 12, 2016, powered by ZenithBank

On Thursday, Naira traded at 365 to the dollar

Thomson Reuters data showed that the naira traded at an all-time low of 365.25 to the dollar on Thursday in a single interbank market trade of $1m.

Interbank trading started two hours after the market opened and offered the currency sharply lower against the dollar. A total of $13m had been traded by 1235 GMT.

The naira plunged to a record low and forwards rose, suggesting traders expect further depreciation, as the economy struggles amid a dearth of dollars.

Three-month non-deliverable forward contracts climbed by 4.1 per cent to 364.5 against the greenback, Bloomberg reported.

Contracts maturing in a year rose by 3.5 per cent to 403, also a record.

The local currency has slumped by 38 per cent since the Central Bank of Nigeria ended a 16-month peg of 197-199 per dollar on June 20.

The capital controls needed to defend the fix sent foreign investors fleeing and took the economy to the brink of recession.

The International Monetary Fund forecasts a 1.8 per cent contraction of the economy this year.

“There’s still a lot of demand for dollars,” Craig Thompson of Nyon, Switzerland-based brokerage Continental Capital Partners SA, said in a telephone interview.

“The central bank has been supplying them. They sold some at 309 on Wednesday to keep the rate down. They’ve been selling dollars most days to keep it going above 320 and have done their best to try and keep it closing around 310. Managing the exchange rate is difficult because there’s pent-up demand,” he added.

Local banks are unable to meet much of the demand for dollars, forcing their customers to the black market.

The naira trades at 394 per dollar at the parallel market, around 11 per cent weaker than the official rate.

“There is no liquidity” in the interbank foreign-exchange market, an analyst at Ecobank Transnational Incorporated, Kunle Ezun, said.

He said the CBN sold dollars on August 15 and 16 and would continue intervening.

“They won’t want to see this jump,” Ezun said. “They will come in, maybe tomorrow, to bring it down to 320 or 330.”

Why The Naira has Crashed so badly- CBN Gov. Emefiele

Godwin Emefiele

The Governor of the Central Bank of Nigeria, Godwin Emefiele has given his take as to why the naira has been in such a freefall in recent months.

The CBN governor claimed that the fall against the Dollar is mostly because Nigeria has nothing to export besides oil.

Emefiele said this during a career talk organised for the teenagers of Redeemed Christian Church of God (RCCG) at TEAP school, Abuja.

He was of the opinion that Nigeria’s over-dependence on oil created this situation and is the reason why the Naira is in such a precarious state.

He believes the only way for Nigeria to dig herself out of this hole is to diversify the economy and look at other revenue streams a move which he says the Federal Government has embarked upon.

He said, “Our currency is naira but there are lots of things we buy but we cannot use the naira.

“We have to use dollars but do we earn dollar? We earn dollar when we have something to sell to people who have dollar so we can gain in Naira.

“In Nigeria, the only thing we have is oil. So when the prices of oil fall, everything falls.

“We then have less dollars and in that case, those who want the dollar will then need more naira to be able to meet the demand.

“Those who did economics will know that the price is determined between supply and demand.

“So if the supply for dollar is very low and the demand for dollar is high, the price of naira will be low.

“So as a country, we should have more goods to sell and export so that we can have enough dollars for supply and the naira can grow.”