A financial analyst, Kalu Aja has said the Naira appreciation in the foreign exchange market is due to FX intervention by the Central Bank of Nigeria to Bureau De Change operators.
Recall that on Monday, CBN sold $10,000 to each BDC at N1,251 per US dollar.
Reacting to the development, Aja noted that the move would not be sustainable without huge foreign reserves.
He added that the problem with Nigeria’s forex crisis is the fall in exports, especially crude oil exports.
“This is a band-aid; the CBN is attempting to fix a problem it can’t fix without a huge war chest of FX reserves. The long-term fix is to export”, he wrote.
He said: “The CBN is a bank, it’s not NNPC or the executive, it can’t pump more oil.
“By celebrating the “strong naira” via the sale of Forex to BDCs, the message being sent is that the nation is at a net positive inflow of FX (current account surplus).
“In effect, we are celebrating whitened fiscal sepulchres, which indeed appear beautiful outward but are full of unproductive high-cost defence of the Naira”.
DAILY POST recalls that the Naira had continued its weeks of appreciation against the USD in the forex market.
On Monday, the Naira exchanged at N1,360 and N1,408.04 per USD at both parallel and official foreign exchange markets.
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