Financial experts have identified some reasons for the gradual depreciation of the naira in spite of series of interventions by the Central Bank of Nigeria in the foreign exchange market.
The experts told the News Agency of Nigeria on Wednesday in Lagos that a single market rate, among others, was required to reverse the depreciating trend of the naira.
The President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, said an apparent devaluation of the interbank market rate was having a negative impact on the naira.
Gwadabe noted that investors were uncomfortable with the prevailing multiple rates in the market, adding that multiplicity of rates could engender currency speculation and round tripping.
The expert also said that the demand for foreign exchange by pilgrims was putting the naira in difficulty.
The ABCON chief urged the regulatory authorities to work towards achieving a single market rate.
Mr. Harrison Owoh, a financial expert and a BDC operator, said the demands for foreign exchange by pilgrims were far outstripping the supply.
Owoh said that $2000 auctioned to pilgrims on subsidised rate appeared not to meet their needs; hence they had to put pressures on the parallel market for more.
NAN reported that the naira relapsed into depreciation after several weeks of appreciation fueled by the aggressive interventions of the CBN at the foreign exchange market.
The naira had exchanged between N360 and N365 to the dollar for about four months before it started depreciating, exchanging between N367 and N370 to a dollar at the parallel market.
A former Governor of the Central Bank of Nigeria, Prof. Charles Soludo, has advised the regulator to dump the multiple exchange rates in the country and adopt a single exchange rate system.
Soludo said this would put an end to the continuous pressure facing the local currency.