Naira Falls to N1,315/$ at Parallel Market, Official Market at N801.10/$

The naira continued to lose value against the dollar at the parallel market on Thursday, dropping to N1,315/$ from N1,225/$ on Monday. This is a 7.35 percent depreciation in four days.

The parallel market is where individuals and businesses buy and sell foreign currencies without the involvement of the official authorities.

According to TheCable, Bureau De Change (BDC) operators in Lagos were buying the dollar at N1,300 and selling it at N1,315, making a profit of N15 per dollar.

“The dollar scarcity is still a problem,” Aliyu, a BDC operator, said.

Meanwhile, at the official market, the naira gained 5.51 percent against the dollar, closing at N801.10/$ on Wednesday from N847.77/$ on Tuesday.

The official market is where the Central Bank of Nigeria (CBN) and other authorized dealers trade foreign currencies according to the rules and regulations of the apex bank.

Data from FMDQ Securities Exchange showed that $100.18 million was traded at the investors’ and exporters’ (I&E) window on Wednesday. The I&E window is a segment of the official market where foreign investors and exporters can access forex at market-determined rates.

The naira has been experiencing high volatility since the CBN adopted a flexible exchange rate regime in June 2023, allowing the market forces of demand and supply to determine the value of the currency.

The CBN also lifted the ban on 43 items that were previously ineligible for forex from the official market. The ban was imposed in 2015 to conserve the country’s foreign reserves and encourage local production of those items.

The CBN said the lifting of the ban was to increase the supply of forex in the market and support the naira. The bank also said it would intervene “from time to time” to stabilize the exchange rate.

However, the decision to lift the ban has been criticized by some stakeholders, including the House of Representatives. The lawmakers summoned Yemi Cardoso, the CBN governor, on Tuesday to explain the rationale behind the policy.

To ease the pressure on the forex market, Wale Edun, the minister of finance and coordinating minister of the economy, said Nigeria expects to receive $10 billion in foreign currency inflows in the next few weeks.

He said the inflows would come from various sources, such as loans from multilateral institutions, diaspora remittances, asset sales, and oil revenues.

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