Business
Finance Analyst, Aja: Naira Strengthens as Forex Subsidy Boost BDC Operators
Attributed to the intervention of the Central Bank of Nigeria in the foreign exchange market through subsidized rates for Bureau De Change operators, financial analyst Kalu Aja pointed out the recent appreciation of the Naira.
Earlier this week, the CBN provided $10,000 to each BDC at a rate of N1,251 per US dollar.
Commenting on this development, Aja emphasized that such measures would not be sustainable without substantial foreign reserves.
He highlighted that the root of Nigeria’s forex challenges lies in the decline of exports, particularly in crude oil.
In his analysis, Aja mentioned, “This temporary solution signifies the CBN’s attempt to address a deep-rooted issue that requires a significant stockpile of FX reserves. The fundamental resolution lies in boosting exports.”
Additionally, he expressed, “The CBN operates as a financial institution, not as NNPC or the executive arm, hence its limitations in influencing oil production.”
Regarding the recent emphasis on a ‘strong naira’ through Forex sales to BDCs, Aja observed the portrayal of a net-positive FX inflow (current account surplus).
He metaphorically stated, “We praise a facade of financial stability, which may appear appealing externally, but it conceals the unsustainable high expenses incurred in defending the Naira.”
Recent reports show a consistent strengthening of the Naira against the US dollar in the forex market over the past few weeks.
As of Monday, the Naira traded at rates of N1,360 and N1,408.04 per USD in both the parallel and official foreign exchange markets.
- Business7 months ago
Finance minister: Tinubu’s government met a bad economy, can’t borrow to fix it
- News4 months ago
World Bank disburses $300m palliative loans
- Business7 months ago
World Leaders, Including Obasanjo, Call for End to Dollar Dominance
- News5 months ago
Blogger Wins N1m Prize at WIMBIZ Conference
- News4 months ago
Nigeria Achieves 78% Vaccination Coverage in 12 States, Reveals Official
- News5 months ago
Nigeria Advocates for Two-State Solution Amid Israeli-Palestinian Conflict
- Business8 months ago
Nigeria’s Crude Oil Production Falls to 3-Month Low Amid Persistent Oil Theft
- Business6 months ago
Marketers urge FG to address rising gas prices