The Naira has dropped down another peg to 485 per dollar. While last year ended with prices remaining above the 400 mark even on parallel markets, the central bank’s efforts revolved around restricting Forex to give the Naira a fighting chance as volumes of naira being sold were slowly accelerating out of control. However this year the Bank pledges to increase dollar supply to meet demands and stem the flow of naira moving out of the economy.
”As you can see, all the pent-up demand for invisibles have been met to the extent that banks are urging customers to come and obtain Forex”, Okorafor
The bank also pledged to increase dollar sales, which helped the naira value in the short term, however going back on its promise caused the small jump of 6N to be reversed within a matter of hours. The bank has announced it will collaborate with apex bank to deliver $195 million into the markets.
To conclude the naira depreciates further despite intensive efforts by the CNB attempting to keep the currency afloat. While we have discussed the various sources contributing to the depreciating value of the naira such as limited Forex liquidity, oil prices, currently the mismanagement of the Central bank has contributed to continued loss of value. The Bank has promised to expand its Forex arsenal to provide enough dollars for trade but as with any currency dependent on a centralized model, its markets revolve around decisions made by the authority and maintained is also required by the key party. In terms of Bitcoin, its decentralized nature has allowed its value to be entirely derived from other users allowing for more stability and natural market progression as while an ETF may have destroyed a centralized currency, the enormous community surrounding Bitcoin has allowed it to keep afloat at stable prices of $1267 at the time of writing.