Nigerians’ growing demand for foreign exchange for health and education purposes abroad is putting pressure on the naira at both the foreign exchange market and interbank offered rate (NIBOR) BusinessDay investigations have revealed.
The high demand for foreign exchange at the bi-monthly Wholesale Dutch Auction System (WDAS), under the invisible sector is putting pressure on the Central Bank of Nigeria (CBN) to continue to defend the naira.
The 2013 budget allocation to both the health and education sectors at 12 percent is regarded by analysts as inadequate to check foreign travels for these services.
“The citizenry have no confidence in the services rendered by these sectors, thereby they will continue to seek alternatives by going abroad,” said analysts at Afrinvest.
Naira under pressure as medical tourism, foreign education rise NAIJA INTEL
The CBN in its latest quarter report said, “the invisible sector accounted for the bulk (42.4 per cent) of total foreign exchange disbursed in the first quarter of 2013 followed by industrial sector (18.9 per cent), mineral and oil sector (15.0 per cent), manufactured products (10.5 per cent), food products (8.9 per cent), transport sector (3.9 per cent) and agricultural products (0.4 percent).”
Indeed, the CBN estimated foreign exchange demand by authorised dealers in the first quarter at $ 4.79 billion, is 11.7 percent above the level in the preceding quarter.
Consequently, the pressure on the naira has brought about a rise in NIBOR rates, typified by call moving from 10.8750 to 12.7083; 7days, 12.4583 from 10.5933 and 60 days to 13.1250 from 11.4167 as at Monday.
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