FG seeks $10bn to stabilise exchange rate as naira tumbles
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| Dollar and Naira |
The Nigerian Federal Government intends to raise $10 billion to increase liquidity in the foreign exchange market. On Tuesday, the naira hit an all-time low of 1,850 per dollar on the parallel market.
President Bola Tinubu, who was represented by Vice President Kashim Shettima, made the announcement during the inaugural Public Wealth Management Conference in Abuja on Tuesday.
The event was organised by the Ministry of Finance Incorporated on the topic "Championing Nigeria's Economic Prosperity".
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In a statement issued on Tuesday, Stanley Nkwocha, Senior Special Assistant to the President on Media & Communications, stated, "The Federal Government has set an objective of raising at least $10 billion in order to improve foreign exchange liquidity, a critical component in stabilising the naira and growing the economy.
“This involves ensuring that the Federal Government's assets and investments are managed optimally toward unlocking their revenue potential. This includes our bold and achievable plan to double the GDP growth rate and significantly increase the GDP base over the next 8 years.”
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The President further emphasised transparency and accountability as key principles, believing that improved corporate governance, innovative partnerships, and attracting alternative investment capital would significantly increase returns.
He noted that these improved returns will then be directed towards “crucial funding for education, healthcare, housing, power, roads and other areas vital to lifting millions out of poverty and stimulating sustainable economic development and job creation for the youth”.
Meanwhile, The BIGTECH NG learnt that exchange rate volatility continued across the country on Tuesday despite the heavy presence of security personnel at the Wuse Zone 4 currency market in Abuja.
According to Abuja currency traders, the dollar was being bought for 1,820 per dollar and sold for 1,850 per dollar, leaving a 30 percent profit margin.
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According to Ibrahim Taura, who operates a bureau de change, if proper measures were not taken, the exchange rate could hit 2,000/$, an all-time low.
“The police filled everywhere in the market today but that still didn’t change everything. Today’s rate finished at 1,850/$ and I will buy it at that rate right now because there is demand,” he stated.
The market is not suitable for good business, said another operator, adding he could only buy at a rate of 1,700/$.
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However, the naira appreciated by 1.48 per cent to 1,551/$ at the official market, following an improved forex turnover of $117.32m.
At the Nigerian Autonomous Foreign Exchange, the local currency has been weakening for three consecutive days.
The country has been battling with a lingering forex shortage due to a decline in oil production and foreign inflows.
According to data from FMDQ Securities, a platform that oversees foreign exchange trading in Nigeria, the local currency hit an intra-day trading high of 1,701/$ and a low of N1,100 before closing at N1,551/$ on Tuesday.
In June 2023, the Central Bank of Nigeria floated the naira after unifying all segments of the forex market, which has resulted in significant devaluation of the local currency.
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