Adedapo Adesanya
By Adedapo Adesanya
The shortage of foreign exchange (forex) to the market in Nigeria has started to take a huge toll on the local currency.
At the parallel market on Friday, the decline in FX liquidity further devalued the Naira against the United States Dollar as operators in the market segment exchanged one single Dollar for N460.
Business Post reports that at the previous trading session, the American currency was traded at N457, indicating a depreciation of N3.
Also, at the same black market, the local currency lost N3 against the Pound Sterling to quote at N560/£1 in contrast to N557/£1 of the previous session, while against the Euro, it depreciated by N4 to sell at N502/€1 versus N498/€1 it traded on Thursday.
Nigeria, which depends mainly on the sale of crude oil for foreign earnings, has struggled lately with FX inflows, especially as a result of the global crunch caused by COVID-19.
A few days ago, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Mr Aminu Gwadabe, lamented the shortage of forex to his members and its impact on the market.
He confirmed that the Central Bank of Nigeria (CBN) was yet to resume the normal sale of forex to his members, noting that the situation was putting pressure on the Nigerian Naira.
On Friday, at the Bureaux De Change (BDC) segment of the forex market, traders in Lagos sold the Dollar for N459 compared with N457/$1 on Thursday, indicating a N2 decline against the American currency.
At the same Lagos BDC market, the domestic currency lost N2 against the British currency to sell at N560/£1 compared to N558/£1 of the previous day and also dropped N2 on the Euro to close at N504/€1 versus N502/€1.
At the Port Harcourt BDC market, the domestic currency lost N2.50 against the Dollar to sell at N455.50/$1 in contrast to the previous day’s N457/$1. Against the Pound, the Naira, however, gained N2 to close at N553/£1 compared with N555/£1 and against the Euro, it weakened by N5 to close at N505/€1 from 500/€1.
In Abuja, the local currency closed flat against the Dollar, Pound and the Euro at N458/$1, N558/£1 and 505/€1 respectively.
Also, at the Kano market, the Nigerian currency retained its previously traded rates against the Dollar, Pound and Euro at N456/$1, 540/£1 and 490/€1 respectively.
However, at the Investors and Exporters (I&E) segment of the market, it was a different outcome as the Naira appreciated against the US Dollar by 94 kobo or 0.24 percent to sell at N386.33/$1 in contrast to N387.27/$1.
This happened despite an increase in the demand for forex at the market window. Transactions valued at $35.92 million were executed at the I&E window on Friday, compared with the $14.68 million achieved on Thursday, indicating an uptick of $21.24 million or 144.7 percent.
At the interbank segment of the foreign exchange market, the Naira remained unchanged against the United States Dollar at N361/$1.
