Nigerian local currency on a daily basis has continued to slide, as it has further dipped to an alarming rate of N400 to the dollar at the parallel market.
The Naira as at Wednesday, February 17, had exchanged at N382 to the dollar while the British pounds N505 to a pound.
The continual fall has push the middle class in Nigeria to poverty line as the nation has continued to slide into recession.
As at today, most family can barely feed once a day, as inflation, cash crunch and unemployment has made a public show of shame of millions of homes who are daily impoverished with government numerous negative policies.
Prices of goods and services have marginally increased beyond the reach of the common man as even the rich and privileged in the society are also complaining.
The Naira to the dollar as at today is exchanging at N400, Euro, N405, British Pounds N505, with projections that before year end, it might slide as low as N1000 to the dollar.
According to the Former Executive Director, Keystone Bank, Richard Obire, the current exchange rate is frightening.
“The current exchange rate is an indication that more Nigerians are moving into the poverty line as their purchasing power is weakened by the day.
“Holding the official rate at N197 does not make economic sense,” Obire said.
Ruling out devaluation of the local currency as panacea, Obire insisted that government has no option but to devalue.
He said: “By devaluing the naira, government is going to get more naira for its dollar earnings.
“The funds should be used to galvanize the economy by building infrastructure and pay salaries of workers. There is really no point leaving the exchange rate where it is now.”
The Chief Executive Officer, Financial Derivatives Company Limited, Bismarck Rewane in his submission has time without number insisted that the Central Bank of Nigeria, CBN, does not have clear understanding of the naira.
He said, “The concerns are that the currency is under pressure, that the currency is misaligned.
“Ghana and South Africa have already moved closer to equilibrium. Nigeria has not really accepted that the currency price is in disequilibrium.”
A currency strategist at Ecobank Nigeria, Kunle Ezun, in his reaction said, the falling naira-dollar exchange rate at the parallel market has to do with the fundamental problem of inadequate forex supply that the nation is grappling with.
“Unless we do something about the supply problem we are having with the foreign exchange reserves, it is a simple and basic economics law – the demand is far above supply.
“We don’t have the forex supply that can match our demand. The naira may sell for over 400 against the dollar over the next weeks because it is still falling.
“In my own opinion, we may be forced to freeze importation of non-essential items in the near future. There are many solutions but a drastic action may have to be taken if things continue this way,” Ezun said.
Other economist suggestions are saying that Buhari’s bailout fund which was rolled out in millions of dollars instead of (naira) to state governors might have also compounded naira woes.