Bloomberg reports that Nigeria's Finance Minister, Olawale Edun, announced that the fall in the naira was because of the overdue forward payments in the foreign exchange, which totaled $6.8 billion.
The Minister advised that until this issue of debt is looked upon, the naira will continue to experience more declines.
He further stated that if this issue is settled and all unpaid contracts are settled, then the naira will become stronger, making way for additional foreign exchange flows.
For months, the naira has been losing its value against the dollar, and on Thursday, it was reported that it was almost reaching its 1000/$ prediction by different economist analysts.
Although the reason for this surge in naira was because the Central Bank of Nigeria (CBN) has not provided adequate dollars in the market,
Edun partly stated,
- The issue we have now is that the market is not liquid enough.
- We are committed to encouraging liquidity based on reforms that have been made at the moment, on the fiscal side and the monetary side. And together with the restoration of trust and confidence, we think the FX flows will return.