Banks offload $3.3 billion amid the Central Bank’s efforts to counter a recent decline in the value of the naira

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The naira experienced a fresh decline in both the official and parallel foreign exchange markets on Friday.

The national currency dropped to N1,670/$ at the parallel market and closed at an official rate of N1,537/$, creating a N133 gap between the official and parallel markets.

Despite increased dollar supply totaling $3.83 billion in eleven days through the Nigerian Autonomous Foreign Exchange, concerns about round-tripping persist.

The Central Bank’s efforts to improve liquidity through directives for banks to sell excess dollars have led to increased forex transactions, but challenges remain as the gap widens, raising worries about potential round-tripping activities.

The naira’s fluctuation in both markets is attributed to strong demand for dollars by speculators and individuals traveling for various purposes.

The NACCIMA urges the government to address the challenges of naira devaluation and inflationary pressure, emphasizing the importance of stabilizing the currency for affordable agricultural inputs and increased consumer purchasing power.

The association supports recent resolutions to boost local food production but highlights the multifaceted nature of rising food costs, including the impact of the depreciating value of the naira.

The plea for enhanced security and infrastructure in farming communities aims to mitigate risks faced by farmers and increase efficiency in the agricultural value chain.

The call for fair trade practices aligns with the need for competitive pricing without compromising the welfare of local producers and consumers, amidst a backdrop of prolonged inflationary pressure and exchange rate challenges in the Nigerian economy.

 

 

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