Categories: Nigeria News

Naira drops to N527 to dollar at parallel market

The naira on Monday weakened to new low of N527 to dollar in the parallel market. The local currency position represents N3 depreciation from N524 to dollar it closed last week.

 

The naira is N5 weaker than N522 to dollar it exchanged on July 28, a day after the Central Bank of Nigeria (CBN) stopped weekly dollar sales to Bureaux De Change (BDCs).

 

A check on the CBN website showed that the local currency remains stable at the official market where its exchanges at N410.29 to dollar.

 

The official market rate represents three kobo depreciation from last week’s close of N410.26 to dollar.

 

The CBN stoppage of dollar sales to BDCs had pushed manufacturers and foreign exchange end-users to the official market where backlog of unmet foreign exchange demand continued to soar. The BDCs are now sourcing dollars from autonomous sources, usually at higher prices.

 

Market dealers and analysts said the policy shift could increase hoarding of scarce dollars in the hands of very few forex dealers.

 

In emailed report to investors, Managing Managing, Financial Derivatives Company Limited, Bismarck Rewane, said channelling dollars to commercial banks will not solve the problem of market volatility.

 

For him, the banks also have challenges with keeping with set foreign exchange trading guidelines.

 

“The question that arises is: What is the optimal solution? Administrative controls or market pricing? The interim solution of substituting BDCs with banks is hardly going to achieve much. You are virtually handing over the yam barns to goats to secure. In the end, there will be no yams nor goats,” he said.

 

According to Rewane, one of the options is to simultaneously allow banks to retail dollars as they have done in the past and make BDCs engage in retailing same but at a buy rate different from today’s subsidised rate, that is, buy dollars from the CBN at the parallel market rate less a N10 premium.

Idoko Dennis

Idoko Dennis is a creative videographer/drone pilot and sport writer. He heads the sport desk and deputizes the head of Idoma TV

Recent Posts

BREAKING: Baltasar Engonga: Equatorial Guinea restricts WhatsApp amid leaked videos

The Government of Equatorial Guinea has restricted citizens from using mobile data to download and…

2 hours ago

BREAKING: Tinubu govt bows to pressure, drops treason charges against EndBadGovernance protesters

The Federal High Court in Abuja dismissed the case against individuals charged in connection with…

5 hours ago

Benue: ‘I’m not behind Ukpute-Bonta crisis’ – Rep David Ogewu

The member representing Oju/Obi Federal Constituency and Deputy Chairman of the House Committee on Army,…

5 hours ago

Tension as new terrorist group ‘LAKURAWAS’ emerges in Nigeria

The Sokoto State Government has raised alarms about the emergence of a new terrorist group…

6 hours ago

Ujah: Ministry of Education breaks silence on suspension of FUHSO VC, issues fresh order

The Federal Ministry of Education has formally addressed the suspension of Prof. Innocent A.O. Ujah…

7 hours ago

‘Herdsmen after our women’ – Idoma community raises alarm

Residents of Ukwonyo community in the Ufia axis of Ado Local Government Area, Benue State,…

7 hours ago