DOLLAR: Why Naira Crashed In Parallel Market - CBN Explains

According to the CBN, the non-remittance of dollars to foreign reserves by the NNPC is responsible for naira's free fall in the official and parallel markets.

As at today, July 29, the naira traded for N718 per dollar at the parallel market and N415.46/$1 at the official market.

The CBN while explaining the cause of naira crisis in a report released on Thursday, insisted that it is not the duty of the apex bank to print dollars.

NNPC and its subsidiaries are the sole managers of crude oil which accounts for more than 80 per cent of Nigeria's Foreign Exchange (forex) earnings.

On Tuesday, an abridged communique of the Federation Account Allocation Committee (FAAC) showed that the Excess Crude Account (ECA) shrank to $376,655.09 from $35.377 million in May.

The ECA is supposed to be a savings buffer meant to steady the government's revenue and serve as a bailout for the economy in dire times.

The abridged version of the FAAC communique was released at the end of the monthly FAAC meeting in Abuja by the Director in charge of Information in the Office of the Accountant-General of the Federation (OAGF), Henshaw Ogubike.

In the CBN report titled: "The forex question in Nigeria: Fact sheetÔÇØ, the apex bank disclosed that "domestically, there has been zero dollar remittance to the country's foreign reserve by the NNPC, insisting that the CBN does not print dollars.

The report states: "As noted by the CBN Governor, Godwin Emefiele, monetary policy alone cannot bear all the burden of the expected adjustments needed to manage these difficulties. It's our collective duty as Nigerians to shore up the value of the naira.ÔÇØ

According to the apex bank, Nigeria earns foreign exchange from four sources - proceeds from oil exports; proceeds from non-oil exports; diaspora remittances, and Foreign Direct/Portfolio Investments (capital flows).