Naira Crashes to 900/$ at Parallel Market as Dollar Scarcity Persists

The naira continued to lose value against the United States dollar at the parallel market on Wednesday, closing at 900/$.

This was a sharp decline from the 960/$ rate that the local currency traded at two weeks ago. The naira had appreciated slightly in the past few days, but the shortage of the greenback in the black market resumed its downward trend.

The naira also depreciated at the Investor & Exporter window, where it exchanged for 773.42/$ on Wednesday, compared to 757.10/$ on Tuesday. The  I&E window is the official market where forex is traded between banks, traders, and investors.

Bureau De Change operators in Lagos, Kano, Abuja and airports sold the dollar between 895/$ and 905/$ on Wednesday, according to The PUNCH.

A BDC operator at the Lagos airport, Sanusi Ibrahim, said he bought and sold the dollar at 890/$ and 900/$ respectively. Another BDC operator in Abuja, Yusuf Kareem, said he sold the dollar for 900/$ due to its scarcity. In Ikeja, Lagos, a currency dealer, Ambo Aliu, said he sold the dollar for 905/$.

The naira’s slide has defied the efforts of the Central Bank of Nigeria to stabilise it. The CBN has threatened to revoke the operating licences of BDCs who violated its rules on forex trading.

The President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, confirmed this to The PUNCH after a meeting with BDC compliance officers.

He said the CBN reiterated that by August 31, 2023, any BDC operator that breached its circular on the allowable margin of -2.5 per cent and +2.5 per cent on the average weighted rate of the I&E closing rate, rendition of returns and payment of penalties, risked losing its licence.

The CBN had announced a new operational mechanism for BDCs to trade forex at a similar rate obtainable on the I&E window.

The CBN circular dated August 17, 2023 stated that the spread on buying and selling by BDCs should be within an allowable limit of -2.5 per cent to +2.5 per cent of the previous day’s I&E weighted average rate. The circular also mandated BDCs to render periodic reports on their forex transactions.

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