July 11 (Lagos) - The short term has seen Naira weakening from 1500 to 1565 in the parallel markets according to websites that track those markets.
This is mounting worries in the business sectors who need Dollars to import raw materials. The FG has recently announced a short term plan to allow duty free import of wheat and Maize up to 250,000,000 KGS each. That's going to cost FG a chunk of foreign reserves to buy those foods. This is going to add to existing demand at the CBN headquarters.
The forex reserves have increased above $34 billion recently but the Naira has not bounced back to levels seen in April and that signals that FG is not willing to sell Dollars to prop up the Naira at the moment.
If that changes, the Naira could appreciate quickly and the FG has the food insecurity problem to solve, can it do both? CBN could increase interest rates again to control inflation. It will take time to clean up the tangles from the immediate past policies of the apex bank.
TRANSCORP gained more than 2% while
OANDO gave up 2% after its dizzying rally over the past 3 weeks.
easykobo.com
July 11 2024
Lagos