- The local currency bowed to the British Pound to end the month of May on a negative note
- During the month, the lowest record was seen in the mid-month as the naira closed at N1,877/£
- According to reports, the demand for forex is influenced by the increasing urge for foreign education and healthcare
Compared to the British Pound, the naira slipped towards the end of May, concluding the month at a loss.
Data available on the CBN website showed that the local currency lost a significant N353/£ to close at N1,877/£ on Thursday, May 30, from the N1,524/£ it closed the previous day, Wednesday, May 28.
Analysis showed that the naira, which started the month at N1,802/£, ended worse off at N1,877/£ despite the CBN’s action to drive the currency up.
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During the month, the naira continued its ups and downs amid the fluctuating demand and supply of foreign currency. The lowest record occurred in the middle of the month when the local currency witnessed a dip to N1,936/£ on May 16.
More demand for forex affects naira
Legit.ng reported that in the nine months from January to September 2023, the apex bank's foreign currency supply for overseas medical and educational costs increased by 49.22% to $1.81 billion.
According to CBN data, Nigeria spent somewhat more on international education and health-related concerns abroad in 2023—$1.81 billion compared to $1.76 billion spent at the same time in 2022.
In an explanatory note titled Note D, the apex bank defined the balance of payments as a systematic record of economic and financial transactions between residents and non-residents of an economy for a specific period.
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Nigerians are renowned for travelling abroad for proper health care due to the poor health infrastructure in their country.
Nigerians' desire for international education has also grown despite declining dollar reserves due to a failing educational system and economic crisis.
CBN report shows $9 billion drop in forex
Legit.ng reported that individuals and businesses involved in importation and other forex-related operations saw a 42% decline in their demand for foreign exchange on an annual basis.
According to the total sectoral consumption of foreign money, $21.12 billion in forex allocations were given to 19 different businesses and services in 2023.
This sum is $8.87 billion less than the $29.98 billion allotted in 2022, a 41.9% decrease.
Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.
Source: Legit.ng
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