Abuja, Nigeria – In response to the consistent naira depreciation, the Finance Minister of Nigeria, Mr. Olawale Edun has shared reason for the naira fall.
Going straight into the concern, Edun stated that $6.8 Billion overdue forward payment was responsible for naira decline.
He insisted that addressing this issue is crucial for stabilizing the local currency.
He also clarified that the resolution of these unpaid contracts could fortify the naira’s value and open avenues for additional foreign exchange inflow.
Over the course of several months, the Nigerian naira has been on a consistent downward trajectory in terms of its value.
In the currency exchange parallel market yesterday, it neared the threshold of 1000 naira per US dollar.
This depreciation can be attributed to the insufficient supply of dollars by the central bank to this particular market.
“The issue we have now is that the market is not liquid enough,
“We are committed to encouraging liquidity based on reforms that have been made at the moment, on the fiscal side and the monetary side. And together with the restoration of trust and confidence, we think the FX flows will return,”
Projections by economists suggest that the central bank is poised to raise interest rates, but the timing remains uncertain due to the postponement of their next meeting, with no announced rescheduling.
In response to the delay and speculations, the Minister of Finance, Mr. Wale Edun, has assured the public that the situation will inevitably reverse once there is a boost in the supply of dollars in the market.
“The commitment is to maintain the existing reforms and improve them. Improving the FX market further so the gap narrows, looking at all options for boosting supply so the one-way bet of speculators that we are seeing at the moment is reversed.”, he stated.