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The Naira has continued to depreciate against the dollar on the Investors and Exporters (I&E) and parallel markets.
The data and information gathered from both segments showed.
Findings show that the currency has lost N100 after sliding from 860/$ to 960/$ at the parallel market as of Friday.
Recall that the Central Bank of Nigeria (CBN) enabled the free float of the naira against other global currencies in June, the naira had traded at 471/$ at the Investor & Exporter window.
However, on June 13, a day after the regulator floated the local currency, the naira rose to 664/$ the next day.
Checks show that the currency has now slided to an all time low of 925/dollar in Lagos.
On Friday, the naira reached a high of 799/$ before closing at 740.60/$ at the I&E forex window. However, at the parallel market, the naira closed at 930/dollar in Lagos and 960/$ in Abuja at the parallel market.
The development came as dollar shortage hits banks with several lenders complaining of not having enough greenback to meet customers’ demand.
At the parallel market, currency dealers also complained of dollar shortage.
Bank officials said the CBN removal of cash deposit limits on domiciliary accounts in June had led to the repatriation of funds through the banks.
As a result, he said the demand for the dollar had outweighed the supply significantly.
“Some of the dollars are being repatriated through the banks but the demand is still higher than supply because everyone is still sourcing for dollar for imports, PTA, BTA, others,” an official of a lender, who chose to speak on condition of anonymity because he was not authorised to speak on the matter, said,
“Nigerians are still hoarding dollar, customers are still hoarding FX because they don’t trust the policy. Banks are not getting forex supply from the CBN regularly like before,” he added.
The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, said that liquidity squeeze in the FX market had continued to put the naira under heavy attack from speculators.
He said, “The dwindling supplies in the I&E window shifted the demand to the parallel market where volatility and spikes is most pervasive. The entire forex market is plagued by liquidity shortages.
“The banks, as a result of the supply shortages, are limiting their available position for the financing of visible letters of credit and abandoning the invisible request like PTA, school fees, medicals of their clients and inadvertently adding more pressure in the parallel market.”
He added, “As it is, most licensed BDCs due to their demand for KYC requirement have lost their clients to the parallel and undocumented space with no regulation and standardisation. It is indeed a difficult time for most of our members as we are excluded from the harmonised market.”
Proffering solutions, Gwadabe said Nigerians should aspire to have a stable exchange rate devoid of illegal economic behaviour like arbitrages, hoarding and panic buying.
“ABCON is desirous to partner the apex bank and the Federal Government for an elaborate dialogue and engagement to champion paths to naira recovery,” he said.