The nation’s currency on Wednesday fell to a record low of N510 against the U.D dollar at the parallel market amid rising external reserves which stood at $28.97 billion as at February 14, 2017 according to data obtained from the website of Central Bank of Nigeria (CBN).
The naira weakened by N3.00k or 0.6 percent lower than N507 per dollar traded the previous day at the unregulated black market.
Against other currencies, naira depreciated by N5.00k to N625 per pounds sterling from N620 the previous day and N535 against the Euro at the parallel market.
At the official inter-bank spot market on Wednesday, the local currency remained stable at N305.50k after weakening marginally on Tuesday to at N305.50k per dollar. Deposit money banks traded only $1.95 million by the market close as the central bank, the main supplier of dollars, continued to ration the U.S. currency.
However, about 2,020 are expected to be allocated dollar to the tune of $8,000 each at the rate of N381 per dollar by the International Money Transfer Operators (IMTOs).
“the increase in liquidity to Bureau De Change (BDCs) sector remains sinequanon to checkmate the recent onslaught on the naira by speculators and hoarders in the market”, Aminu Gwadabe, acting president, Association of Bureau De Change Operators of Nigeria (ABCON) told BusinessDay on a telephone conversation.
He told his members to comply with the new rate of N399 which they agreed last month to stabilise the foreign exchange and to help bridge the over 40 percent gap between the official and parallel market.
The retail currency trading accounts for less than 5 percent of all foreign currency trading in Nigeria, they help drive the currency’s exchange rate due to the scarcity of dollars on the official channel.
Nigeria’s first recession in 25 years occasioned by currency crisis was triggered by a sharp drop in crude oil prices.
Godwin Emefiele, governor of the CBN has said the Apex bank was looking at ways to boost dollar liquidity on the official market to support the naira while insisting on no currency devaluation.