Lucky Fiakpa
8 December 2008
Bankers under the aegis of the Money Market Association of Nigeria, MMAN, weekend met with the market regulators to work out ways of stemming the recent downwards plunge of the naira.
At the spot Nigerian Inter-Bank Foreign Exchange Market, NIFEX, the naira depreciated from N119.9025 to the dollar on Monday to N129.00 on Wednesday, a decline of N10. This has created anxiety in the economy since then as to what would be the fate of the currency in 2009. It is in this context that the meeting between the market operators and regulators could be appreciated.
Apart from that, the bank treasurers also took time out to review the national economic performance in the outgoing year as well as offer their input on policies that can enhance the efficiency of the financial market.
This year's retreat with the theme, "Global Financial Crisis: Issues and Implications" also focused on exchange of views, ideas, and experiences by stakeholders in the financial industry on the current global financial crisis and its effects on the economy.
Professionals from the industry, which included senior management treasurers and staff of banks, discount houses, non-bank financial institutions, regulatory and supervisory authorities, institutional investors, fund managers and other corporate treasurers, attended the function.
The naira continued on a freefall last Wednesday at the official market, the Wholesale Dutch Auction System (WDAS), losing N7 and trading at N127.5 to the dollar, a development many believe was connected with the current global financial meltdown which has weakened oil demand in the US, Nigeria's major oil importer as well as the 2009 Appropriation Bill whose indices are not too encouraging. At the parallel market and bureau de change the rates performed even poorly, nose-diving to as low as N130 to the dollar.
The naira, which had recorded relative stability over the last three years, had shed N1.11 against the dollar at Monday trading, fuelling apprehension among major dealers and operators of a bleak next year amid a global financial meltdown. As against market demand of about $2 billion on Monday, only $100 million was made available at the Monday's WDAS session, leaving banks to source for dollars from other areas thereby exerting downward pressure on the naira.
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