By Dipo Olowookere
All is not well with the Nigerian Naira in the black market segment of the foreign exchange (forex) market. This is because the exchange rate of the nation’s legal tender has further weakened against the United States Dollar.
One of the reasons for this plunge is the incessant scarcity of FX in the Nigerian financial system. The crisis has failed to end despite the efforts made by the Central Bank of Nigeria (CBN).
To boost the value of the local currency, the central bank introduced various forex policies like defending the Naira in the market through the regular supply of Dollars to traders and giving a N4 rebate for every Dollar received in Nigeria through diaspora remittances.
The CBN also stopped the sale of FX to Bureaux De Change (BDC) operators and stopped an online platform, AbokiFX, from publishing black market rates.
However, despite these actions by the apex bank, the Naira has not been able to trade stronger than the Dollar and other foreign currencies in the market.
On Thursday, the value of the Naira to the American currency further depreciated in the parallel market by N7 or 0.96 per cent to trade at N735/$1 compared with Wednesday’s rate of N728/$1.
Business Post observed that the local currency exchange rate on the streets further weakened due to the scarcity of Dollars.
“We have not been able to get Dollars at the banks and other sources,” one of the currency hawkers in the Egbeda area of Lagos State informed this newspaper on Thursday morning.
“If you have money, I will advise you to quickly buy some Dollars because, with the rate things are going, it might hit N750/$1 next month,” another FX trader, Alhaji Isa, noted.
But a business analyst with Arise TV, Mr Chika Mbonu, believes that the commencement of political campaigns in Nigeria will attract Dollars into the system and reduce the Dollar scarcity.
“Those who kept the Dollars and those coming into the country will bring foreign currencies into the market in exchange for the Naira,” he said on Global Business Report hosted by Mr Boason Omofaye on Thursday morning.
Business Post reports that the currency traders at the unofficial exchange market buy Dollars from customers between N725/$1 and N730/$1. For those with cash, they buy at N730/$1 and for transfers, they buy at N725/$1 or below, depending on the bargaining power
Adedapo Adesanya