Dollar Squeeze

Nigeria needs to clear dollar backlog to avoid further devaluation, analysts say

By Vincent Nwanma

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Posted on November 4, 2021 07:17

Clearing unmet demand for dollars would go a long way to helping Nigeria escape from the prospect of a further currency devaluation, analysts and executives say.

“Rather than devalue the naira further, the authorities need to work on addressing market confidence, which may start with clearing of demand backlog, both from foreign investors and manufacturers,” says Abiola Rasaq, former chief economist at UBA Group.

Nigeria has an official window for foreign currency transactions where the naira is priced much higher against the dollar than on the black market. The authorities have sought to support the official rate with a range of restrictions on dollar demand, and in July, it ended the sale of forex to bureau de change operators.

  • Vice President Yemi Osinbajo said in October that the central bank (CBN) needs to revise its foreign exchange strategy and ensure that the naira’s official valuation reflects market reality.
  • The official rate on November 3 was 413 to the dollar, but the black market price is 572, according to Naija News.
  • A surge in

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