Dollar Crashes to N1,520/$1 at Parallel Market

By Dipo Olowookere

The value of the Naira to the US Dollar significantly strengthened in the parallel market on Monday, trading at N1,520/$1 compared with the N1,700/$1 it was traded on Sunday.

This development followed steps taken by the Central Bank of Nigeria (CBN) last week to stabilise the currency market and take control of the ecosystem.

Recall that over the weekend, the central bank announced plans to increase the minimum capital base of Bureaux De Change (BDC) operators to N2 billion for national operations and N500 million for regional.

It was also speculated that the bank may resume the weekly sale of foreign exchange (FX) to BDCs in a bid to boost liquidity and give the Naira more weight.

In 2021, the central bank under the former Governor, Mr Godwin Emefiele, stopped the sale of forex to BDCs, claiming they were aiding financial terrorism.

He transferred this function to the banks, and since then, the local currency has been battered because customers are unable to get access to FX when needed.

There are indications that the BDC operators may begin to sell FX to customers, though at the retail end, especially for transactions not more than $1,000.

Since last week, the Economic and Financial Crimes Commission (EFCC) and other security agencies have been going after BDCs across the country.

This has affected the market, though the Naira has gradually gained against the Dollar, which was almost hitting N2,000.

At the Olugbede Model Market in Egbeda under Alimosho Local Government Area of Lagos State, the American currency was exchanged with the Naira at N1,520/$1 on Monday afternoon.

In the same vein, at the Alade Market in Ikeja, where trading activities have slowed because of the actions of security operatives, the Dollar was exchanged with the Naira between N1,515/$1 and N1,550/$1.

Also, in the peer-to-peer (P2P) segment of the forex market, the Naira appreciated against the greenback today by N108 to trade at N1,597/$1 at the time of filing this report compared with N1,705/$1 it was transacted over the weekend. At midday on Monday, it traded at about N1,638/$1.