Key Takeaway
- Naira falls to the US dollar despite CBN influx of Forex
- Nigerian market stabilizing following recent developments
- Cryptocurrencies are seen as an alternative to resolving forex problems
Local reports state that the Naira had initially gained value ahead of the weekend, but this gain has been lost in recent days. The value depreciated from N507/$ to as high as N514/$ in the early hours of August 9, 2021.
This is despite the increased supply of Forex by the Central Banks in line with new regulations. It should be recalled that the apex bank had stopped selling dollars to private exchange operators over claims that they were indirectly funding the black market.
Despite the initial fall of the Naira due to fear in the market. The Naira has recovered significantly in the past seven days following assurances from commercial banks that Forex will be made available to customers for legitimate reasons.
However, this has not prevented scrutiny from the business community, given the country's heavy dependence on the dollar. Nigeria imports 70% of what it consumes, and forex rates affect the daily lives of the populace.
There have been calls from the local crypto community for the country to embrace digital assets like bitcoin and Ethereum as legal tender. It should be noted that the Central Bank banned cryptocurrencies in February.
However, the ban has been ineffective as many Nigerians have turned to p2p platforms like Remitano to trade their digital currencies. Recent reports also place the country among the top bitcoin trading destinations in the world.
The CBN has stated its desire to launch a digital currency called the e-naira before the end of the year. This has generated mixed reactions, and it remains to be seen whether the initiative will be successful and reduce the dependence on Forex.
Do you think crypto can replace the dollar as an alternative Forex source in Nigeria?
