The Naira again slumped in value early Wednesday, trading at N707 to a US dollar at the parallel market, representing a 0.28% depreciation compared to N705/$1 recorded in the previous trading session.
Similarly, the exchange rate at the cryptocurrency peer-to-peer (P2P) FX market also fell by 0.35% to trade at N706.98/$1 on Wednesday morning, as against N704.5/$1 that it traded during early trading hours on Tuesday.
According to information for black market traders, the Nigeria’s national currency exchange rate at the official Investors and Exporters (I&E) window remained stable in the past week, closing on Tuesday at N436.04/$1.
The Tuesday’s exchange rate varied slightly when compared to N436.5/$1 recorded in the previous trading session.
Data on Nigeria’s foreign reserve also showed that on Monday indicated that it stood at $38.82 billion, representing a decline of 0.26% from $38.92 billion recorded last Friday
Meanwhile, a total of $83.71 million was recorded as forex turnover on Tuesday, which is 16.1% lower than the $99.78 million that exchanged hands on Monday.
Analysts believe that one of the factors affecting the Naira exchange rate with foreign currencies is the nation’s foreign reserve, which due to sundry macroeconomic vagaries in recent months, particularly the volatility of the domestic environment and international oil market, has not been stable in recent months.
For instance, despite efforts by the Organization of Petroleum Exporting Countries’ (OPEC’s) increased oil quota allocations to Nigeria in recent months and by implication, increase the country’s Forex earnings, it has not been able to meet the quota target due to worsening insecurity in the oil producing region in the country.
Only last weekend, the Nigerian National Petroleum Company Limited (NNPCL), disclosed Nigeria had been losing $700 million monthly to oil theft and vandalism at terminals in the upstream subsector of the nation’s hydrocarbon resources industry
The group general manager of the National Petroleum Investment Management Services (NAPIMS), a corporate services unit in the upstream directorate of NNPCL, Mallam Bala Wunti, gave this hint during a tour of NNPC facilities on Sunday.
According to him, the worsening insecurity in the upstream subsector is adversely affecting Nigeria’s oil production in some terminals.
For instance, the group general manager lamented that some pipelines, particularly those around the Bonny oil export terminal, had not been operational for some time due to the activities of oil thieves and pipeline vandals.
He explained: “When you multiply seven million barrels by $100 that is $700 million lost per month, adding that about 150,000 barrels expected are diverted, we are not producing due to security challenges.
“The Shell Petroleum Company (SPDC) trunk line, TNP transnational pipeline cannot be operated and this has been the case since March the 3rd”, Wunti added.
