July 14 (Lagos) - The Naira declined to 363 against 1 USD on the parallel markets as the supply of US Dollars was low.
They are already talking of another depreciation and not devaluation because foreign investors do not seem to be comfortable with the Naira at 280 levels. They are also talking about letting BDC's back in the game but they were taken out for a purpose or was it just a trial or error?
The CBN is the only source of supply of USD's at the moment. All the talk of diversification of the economy is only talk so far but nothing on the ground to show for it.
The flexible forex policy has not yielded the desired results so far and has been disappointing. Upwards of $700 million is due in the first future transaction so analysts are nervously watching what is going to happen.
The CBN meanwhile has still held interest rates below the inflation levels so the economy remains in the incubator.
On the inter-bank market the Naira is trading at 283.50 but this market is only for everyday people. So a whole lot of demand gets transferred to the parallel markets.
These policies seem to be a trial and error approach and the damage to the country's economy is everywhere to see from inflation to unemployment.
reporting for easykobo.com on Thursday, July 14 2016 from Lagos, Nigeria
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