Forex experts Importers scramble for dollar to weaken naira

A surge in demand for the dollar in the coming weeks will put the naira under pressure, Checkout Magazine learnt on Sunday.

This is as a result of importers scramble for scarce dollar to meet business demand.

The rising dollar demand and a shortfall in forex supply have been putting pressure on naira.

At the weekend, the naira dipped against the dollar to N475, the second slide since the start of the year in the unofficial market.

A Trading Desk Manager at AZA, a global forex trading firm, Murega Mungai, said the return to nomalcy of commercial activities after the end of year holidays would require Nigerian businesses sourcing for more dollars to replenish their stock.

In a report sent to investors titled: Business as usual means weaker naira”, Mungai explained that after the recent official rate adjustment, market players await communication from the Central Bank of Nigeria (CBN) that might provide forward guidance for the naira.

“We expect the currency to remain around N470 to N480 levels in the parallel market in the near term.”

Other analysts said demand for forex remains high and the supply is inadequate for regular uses, let alone the delayed external payments.

International Monetary Fund (IMF) and World Bank have asked Nigeria to reform the naira, which according to the multilateral institutions ‘is too expensive’.

The global lenders have intensified calls on Nigeria to speed up currency reforms without which Nigeria may fail to achieve the growth it needs to prevent millions more from falling into penury.

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