• Hausa Edition
  • Podcast
  • Conferences
  • LeVogue Magazine
  • Business News
  • Print Advert Rates
  • Online Advert Rates
  • Contact Us
Tuesday, August 26, 2025
Leadership Newspapers
Read in Hausa
  • Home
  • News
  • Politics
  • Business
  • Sport
  • Health
  • Entertainment
  • Opinion
    • Editorial
  • Columns
  • Football
  • Others
    • LeVogue Magazine
    • Conferences
    • National Economy
  • Contact Us
No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Sport
  • Health
  • Entertainment
  • Opinion
    • Editorial
  • Columns
  • Football
  • Others
    • LeVogue Magazine
    • Conferences
    • National Economy
  • Contact Us
No Result
View All Result
Leadership Newspapers
No Result
View All Result

Forex: Hoarding, Poor Confidence Driving Scarcity – Adenikinju, MPC Member

by Nse Anthony - Uko
2 years ago
in Business
Forex
Share on WhatsAppShare on FacebookShare on XTelegram

President of the Nigerian Economic Society, Prof Adeola Adenikinju has flayed the current low value of the naira, insisting that the exchange rate market is not driven by fundamentals.

Advertisement

This is as Nigeria’s currency is on the cusp hitting a record-low of N1,500 against the US dollar in the face of a severe dollar shortage in the parallel market.

Prof. Adenikinju, also a member of the Monetary Policy Committee of the Central Bank of Nigeria (CBN), said the current scarcity of dollars that is fuelling the depreciation of the naira is largely as a result of hoarding by those who are still watching to see what policy direction the CBN plan to tow.

The professor of Economics who spoke during a visit to the LEADERSHIP Group head office in Abuja, said many people have lost confidence in the system due to lack of clarity about the promise by the apex bank to sustain the flow of foreign exchange in the country to meet demands.

“A lot of what is happening now in the market is not driven by fundamentals, it is also driven by people just lacking faith in the system.”

RELATED

PremiumTrust Bank Reassures Stakeholders Of Strong Performance, Profitability

PremiumTrust Bank Meets N200bn Capital Requirement For National Commercial Banks; Reinforcing Its Leadership As Nigeria’s Fastest-Growing Bank

8 minutes ago
JUST-IN: NAICOM Revokes Operational Licenses Of Niger Insurance, Standard Alliance

Delayed Guidelines Drag Insurance Recapitalisation Process

17 hours ago
ADVERTISEMENT

According to him, a lot of people are thinking, “I don’t trust this system and I don’t understand what the CBN is doing so I am going to keep my money in dollars.”

He said “So people are just buying dollars and keeping and those who have dollars are not willing to bring it to the market.”

Prof Adenikinju however said that once there is a clear guidance as to where things are going there will be a difference.

ADVERTISEMENT

He noted that initially, there were some pronouncements that the CBN governor made when he first came in, about what he was going to do and the market started narrowing, because he had said they were paying back some of the legacy debts.

Recall that the federal government had promised to get dollars from Afreximbank, Saudi Arabia among others, into the system.

“If all these had happened accordingly, it would have sent the message that the market is able to meet the demand and people would feel there is no need to hoard. But when he made those promises and nothing happened and no one was providing information as to why the monies had not come in, people concluded that something was wrong and everybody went back to hoarding. So it’s the lack of confidence in the system that has caused this crisis,” he said.

He said there has to be a clear cut policy to sustain liquidity in the market. “In this kind of economy you need to build that confidence, that trust, and inspire people. To regain confidence, there must be a clear flow of communication and there must be analytics to show people what you are doing and it’s not just rhetoric.

Meanwhile, the exchange rate fell to a fresh low of N1,460 per dollar at the parallel market on Tuesday morning with traders expecting further weakness in the coming days as dollar shortages worsen.

The naira also fell to an all-time low of N1,348.63 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, a 33.87 percent decline compared to the N891.90 quoted on Friday, according to data from the FMDQ.

The exchange rate had hit an intraday high of N1,414.94 per dollar on the day as the daily FX market turnover dropped by 36.68 percent to $64.29 trillion on Monday from $100.97 million recorded on Friday.

Speaking on whether the plan to float the exchange rate was the right one, Adenikinju said economists were worried about the dual exchange rate window that the country operated in the last administration and the negative impact it had on the economy.

“In the benefit of hindsight, when Emefiele was there, a lot of economists and even commenters were worried that the country had different exchange rates for the naira. We had one at N400/$ and another at N700/$ and those with connections will get it at N400, then go to the market and sell at N700, We were all worried. We shouldn’t have that kind of multiple dual exchange rate because it’s not good for investment, or planning. It introduces some kind of shady deals with people just trying to get rents or arbitrage. So most economists were in agreement that the rates needed to be unified.”

Investigations revealed that there is a significant surge in the demand for dollars due to legitimate needs, creating a challenging environment for importers and travellers who heavily depend on the black market.

Importers are finding it increasingly difficult to secure the necessary funds from the official FX market and black market.

Legitimate needs driving the demand include Form A applications for Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medical fees. Small and Medium Enterprises (SMEs) are also grappling with the scarcity, as highlighted by the use of Form Q.

“The problem is that dollars are scarce in the market. People are not bringing dollars and demand is so high that is why the price is going up,” a street trader told BusinessDay on Tuesday morning.


Join Our WhatsApp Channel

Nigerians can now earn US Dollars monthly by acquiring domains cheaply and reselling for profits up to $18,000 (nearly ₦30Million). Beneficiaries include professionals, entrepreneurs, civil servants and more. Click here to start.


Tags: Forex
SendShare10180Tweet6362Share
ADVERTISEMENT
Previous Post

AFCON: CAF Confirms Osimhen, Others’ Drug Tests Negative

Next Post

Interconnect Debt Issue: MTN Vows To Comply With NCC’s Directive

Nse Anthony - Uko

Nse Anthony - Uko

You May Like

PremiumTrust Bank Reassures Stakeholders Of Strong Performance, Profitability
Business

PremiumTrust Bank Meets N200bn Capital Requirement For National Commercial Banks; Reinforcing Its Leadership As Nigeria’s Fastest-Growing Bank

2025/08/26
JUST-IN: NAICOM Revokes Operational Licenses Of Niger Insurance, Standard Alliance
Business

Delayed Guidelines Drag Insurance Recapitalisation Process

2025/08/25
Large-cap Stock Drives Local Bourse To N180bn Gains
Business

Shareholders Get N117.86bn Half-year Dividends From 12 Listed Firms

2025/08/25
UBA Bank plc
Business

UBA Customers To Win N150m In Super Savers Promo

2025/08/25
Bureau Rate NIMASA High On Public Service Reforms
Business

NIMASA, Engineers Strengthen Collaboration For Blue Economy Growth

2025/08/25
Ojulari’s First 100 Days at NNPC Ltd: A Bold Start Anchored On Reform, Transparency, And Clean Energy
Business

After 3 Misses, NNPC Sets Nov For AKK Gas Pipeline Completion

2025/08/25
Leadership Conference advertisement

LATEST

We Must Invest In Cyber Defence, Artificial Intelligence, Indigenous Military Technology – CDS

Security Summit Seeks End To Killings In Benue

Gombe Gov Signs Bill Creating 13 LCDA

PremiumTrust Bank Meets N200bn Capital Requirement For National Commercial Banks; Reinforcing Its Leadership As Nigeria’s Fastest-Growing Bank

FG Issues Fresh Flood Alert To 9 Northern States

We’ll Do More To Secure Katsina – COAS

Parties Accept Mediation In Abia Land Dispute

PDP’s Zoning Of Presidential Ticket To South Sparks Comments

Oil Theft Nearly 100% Eliminated, Says NNPCL GCEO

FG Signs BASA Agreement For Direct Flights To Brazil

© 2025 Leadership Media Group - All Rights Reserved.

No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Sport
  • Health
  • Entertainment
  • Opinion
    • Editorial
  • Columns
  • Football
  • Others
    • LeVogue Magazine
    • Conferences
    • National Economy
  • Contact Us

© 2025 Leadership Media Group - All Rights Reserved.