Naira sustain its falls, exchanges above 1,100 to the U.S Dollar
NIGERIA, Oct. 23 – The naira has sustained its slump further as the U.S dollar scarcity bites harder at the parallel market intensifying pressure on the Nigeria currency.
On Friday, it was observed that at the parallel market that the naira traded 1,175 per U.S dollar at the start of market and closed at 1,190 per U.S dollar .
Biztv24 recalled that two weeks ago, the naira had traded at 1,100 per U.S dollar at the parallel market.
However, at the close of market on Friday at the Investors and Exports forex Window, the currency appreciated slightly as 1 U.S dollar was sold at N808.28, from N810.05 to the dollar on Thursday, according to figures obtained from the FMDQ.
According to news article obtained from The PUNCH, some Bureau de Change (BDC) Operators who spoke to them on this matter noted that the dollar was scarce as many did not have forex to sell to customers.
One of the BDC operators, Jubril Mutiu, said, “On Friday, the price was 1,175/$, but we don’t even have it. It is not available right now.”
While another BDC operator, Adamu Afeez, said, “We are looking for those to sell to us, but now, we don’t have the dollar to buy. If we don’t have one, we cannot sell.”
Also Ibrahim Abu, another BDC operator, said, “We sold for 1,175/$ in the morning till afternoon on Friday. By 2 p.m., it was already selling for 1,190/$. It has been fluctuating. I don’t know what the rate will be on Monday.”
The naira had continued to maintain devaluation following the CBN’s order to the lending institutions to allow the free flow of the country’s exchange rate in June.
Before floating the naira, it traded at the official market on the FMDQ at 471.67/$ and at the parallel market at 765/$ in June.
The President, Association of Bureaux De Change Operators of Nigeria, Dr Aminu Gwadabe, said achieving stable, strong and virile exchange rate in Nigeria would require full participation of BDCs in the retail segment of the forex exchange market.
He said the challenges confronting the nation’s forex market and depreciation of the naira required cooperation from all.
The BDCs, he said, were licensed to play at the retail end of the forex market and should be fully involved in providing lasting solutions to the ongoing volatility in the exchange rate.
Gwadabe said, “The continuous depreciation of the naira in official and parallel markets does not benefit the BDCs and the domestic economy. Hence, steps should be taken to reverse the trend and strengthen the local currency for maximum economic impact.”
He said different approaches taken by the Central Bannk of Nigeria to close in the exchange rate gaps showed genuine intentions of the regulator to entrench exchange rate stability, but getting the BDCs involved in the solution recipe would bring the desired results of a highly liquid market and stable rates.
Gwadabe noted that, like every other market segment, the market’s illiquidity remained a significant concern to the BDC sector.
He said aside from illiquidity in the market, ABCON was unhappy with the unlicensed forex dealers who were at the centre of speculative activities and attracting a negative image to the sub-sector.
The pressure on naira is having serious economic consequences on the country’s revenue and affecting Small and Medium scale Enterprises (SME) negatively. The SMEs are the drivers of economy and subjecting it to intense heat as a result of high exchange rate could be dangerous to some of these businesses.
