ABUJA- Nigeria’s Finance Minister, Adebayo Olawale Edun, has said up to $6.8 billion in overdue due forward payments on the foreign exchange market are to blame for the naira’s decline and must be resolved for the local currency to stabilize.
According to a report, he stated that if these unpaid contracts can be addressed, it will strengthen the naira and open the door for additional foreign exchange flows.
This comes after a report that the FG’s economic plans are being disrupted as the naira breaks records against the dollar in the parallel market.
In response to worries about postponing the Monetary Policy Committee meeting, the naira continued its wild plunge on Thursday, falling to a record low of 1,050 per dollar on the black market.
In a recent interview in New York, Edun, who travelled with President Bola Tinubu to the United Nations, stated that the problem is that the market is not liquid enough.
He said:
“We are committed to encouraging liquidity based on reforms that have been made at the moment, on the fiscal side and the monetary side. And together with the restoration of trust and confidence, we think the FX flows will return.”
The country is plagued with various issues affecting its economic stability inherited from the previous administration. As the scarcity of dollars persists, many are forced to take to the streets for foreign cash since the central bank isn’t giving enough dollars.
Nigeria’s inflation is at its highest level in more than 18 years. Committing to improving these, the finance minister said:
“The commitment is to maintain the existing reforms and improve them. Improving the FX market further so the gap narrows. Looking at all options for boosting supply so the one-way bet of speculators that we are seeing at the moment is reversed.”
The Nigerian Central Bank’s earlier scheduled meeting for September 25-26 had to be postponed while they awaited the confirmation of Olayemi Cardoso, the newly appointed governor who had worked for Citigroup.
Making crucial choices has been delayed due to the resignations of the acting governor, four deputy governors, and the acting governor.
The Nigerian naira has hit a record low of N980 per dollar amid rising demand for dollars in the black market.
The naira fell as demand for dollars by importers and international students surged.
The local currency depreciated by 0.34% at the Investors and Exporters (I&E) window, trading at N776.60 per dollar on Tuesday, September 19, 2023, as against the N773.98 traded on Monday, September 18, 2023, according to data from FMDQ.
