The Naira for Dollar Scheme recently introduced by the Central Bank of Nigeria has failed to incentivize the foreign exchange (forex) market as Naira weakened further against the Dollar at the parallel market.
At the parallel market, the naira depreciated by 1.04 per cent to N485 per dollar, on the same trend with the Bureau De Change (BDC) segment, where naira depreciated by 0.42 per cent to close the weekend at N477 per dollar.
However, at the official Investors & Exporters (I & E) window, naira appreciated by 0.24 per cent to close at N410 per dollar amid sustained rise in crude oil prices.
Data provided by Cowry Asset Management showed that naira closed flat at N380.69 per dollar at the Interbank Foreign Exchange market amid weekly injections of $210 million by CBN into the forex market.
The apex bank’s Naira for Dollar Scheme aims at encouraging dollar remittances by paying N5 for every dollar received. The scheme took effect from March 8, 2021 and is scheduled to end on May 8, this year.
Market pundits said the scheme was a “too little attempt” to correct pricing anomalies fostered by policy inconsistencies and lack of clarity. The market saw the naira incentive as a subtle devaluation of the national currency.
“However, we feel that the CBN’s Naira for Dollar Scheme appears to be another form of Naira depreciation which may have sent the wrong signal to the forex market,” Cowry Asset Management stated.
Senior Research Analyst, FXTM, Lukman Otunuga said policy somersaults over the past few weeks have fostered a sense of uncertainty.