Nigeria's Economy At Stake As A Dollar Exchanges For 390 Naira

Photo source: nigeriancurrent.com

Following the scarcity of dollar at both the interbank foreign exchange market and the black market the dollar as at Wednesday now exchanges for N390 at the parallel market, which tends to cause an economic crunch in Nigeria.




 The scarcity of the forex at the interbank market has being alleged to be caused by lack of stringent intervention by the Central Bank of Nigeria (CBN) after the floating of the naira which led to the continuous depreciation of the naira at both the parallel market and the black market.

Photo source: mediahoarders.com.ng

 Although some analysts presumed that it may also have being caused by the the summer rush made by holiday makers abroad. Of course it's August (all Nigerian Primary/Secondary Schools cgo for the long vacation).



 The inflation and contraction caused by the rise and fall of the naira is likely to cause economic crisis  in Nigeria if a lasting solution is not made as predicted by some analysts.
 The Chief Executive Officer Cowry Asset Management Limited Mr. Johnson Chukwu revealed to Punch that "if the naira continues to fall against the dollar in the parallel market it means the inflation and the contraction in economic growth we are experiencing now will worsen."



 Suggesting what should be done he said "Our capacity to defend the naira is getting weaker and weaker. And like I have said before we need a budget support facility of say at least $10 billion from the International Monetary Fund (IMF) to stabilize the currency.  We will need this to calm the market and foreign investors will have the assurance to come in."
 Nigeria is obviously facing hard times, just some couple of weeks ago the country was presumed to be technically in recession.

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