Emmanuel OchayiThe Nigerian naira experienced an upswing against the US dollar, closing at N815.32/$1 at the official market on Tuesday, October 31, 2023.
This sudden resurgence represents 21.81% increase from the N993.82/$1 exchange rate recorded just a day earlier.
Fluctuations in the Naira’s value has kept the country on edge, with an intraday high of N998.00/$1 and an equally bewildering intraday low of N6475.00/$1 on October 30, creating a spread of N523/$1.
Data sourced from the official NAFEM window indicates that forex turnover on October 30 plummeted to $881.31 million, signifying 66.01% decrease compared to the previous day. These fluctuations have sent shockwaves through the financial landscape.
Amidst this uncertainty, the federal government has announced plans to introduce comprehensive reforms to the forex market. Their objective? Boosting the value of the naira while suppressing the activities of illegal currency trading, as revealed by a senior government official in a Bloomberg report.
In this move, the government’s new rules will expand the official market to accommodate all legitimate transactions, ensuring that the shadowy “illicit” black market faces a crippling shortage of supply.
The goal is to restore stability and transparency to the forex market and to curb the rampant speculation that has plagued the country for far too long.
Chairing the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele shared the government’s timeline, stating, “We think all of that will happen before December, and maybe in a matter of a couple of weeks, we will begin to see the results, such that before the end of the calendar year, naira should find its true value, not the one that is being done currently in the parallel market.”
In an illuminating interview, Oyedele elucidated the government’s comprehensive strategy. This strategy encompasses clearing the backlog of foreign exchange demand, which is estimated to be nearly $7 billion, establishing clear and transparent guidelines in the FX market, and increasing liquidity in the naira forward market.
The government’s resolute stance on these initiatives is poised to recalibrate the financial landscape, setting the stage for a more stable and prosperous economy.
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