Market News
CBN’s Naira4dollar promo fails to save Naira as forex scarcity worsens - BLUEPRINT
Nigeria’s local currency, the Naira has fallen by a whopping N127, whopping 26 per cent depreciation since the introduction of the “Naira4Dollar” scheme by the Central Bank of Nigeria (CBN), a policy that was intended to help boost the Naira and solve the persistent foreign exchange (forex) scarcity.
The CBN launched the “Naira 4 Dollar Scheme” on March 8, 2021, to incentivize the inflow of remittances from the diaspora into the country, in response to the inadequate forex supply and ongoing pressure on the country’s exchange rate.
At the parallel market, Naira goes for N612/$ compared to the N485/$ prior to the launch of the scheme.
From the Central Bank of Nigeria’s perspective, the Naira4Dollar initiative has successfully provided an opportunity to encourage alternative forex inflows from non-oil sources.
However, from the perspective of an average Nigerian, it may be unclear how to acknowledge that this initiative has been successful. This is because the challenges of accessing foreign exchange persist.
When the Naira4Dollar scheme was introduced in March 2021, the CBN had suggested that a huge portion of the diaspora remittances would be incentivized to use the Naira4Dollar initiative rather than going through non-official channels.
In other words, the target was to centralize the diaspora remittances of over $20 billion annually. Thus, centralized forex inflows would in-turn, favourably impact the value of the Naira and slow down its depreciation.
