The naira exchanged at 600 to a dollar on Monday at the parallel market, increasing fears of further degradation of the country’s currency.
A sharp increase of 184.25 naira was visibly noticed at the importers and Exporters window, causing a widening exchange rate.
At Zone 4 in Abuja, which is the hub of the parallel market in the Federal Capital Territory, two Bureau de Change Operators, Mohammed Isa, and Abu Abdullahi, confirmed that the rate was N599/$ at 10am and 11.14am respectively.
However, the rates for both BDCs changed to N600/$ when they were separately contacted at N3.13pm and N5pm respectively on Monday.
“If I reduce this by N1, I will not be able to make any profit,” one of the two BDCs, Abu Abdullahi, said.
At the Lagos airport on Monday, a Bureau de change operator, Adamu Haruna, said that the rate was “N600/$, no more, no less.”
When contacted Bala Usman, a BDC operator at Amuwo-Odofin in Lagos, gave an initial rate of N598/$ in the morning but changed to N599 at 2.53pm when reached again.
“The demand is increasing and the dollar is very scarce now,” he said.
Naira has weakened in the parallel market due to increased speculations, falling external reserves, and low foreign exchange inflows into Africa’s biggest oil producer.
The country’s external reserves fell by $313m in March, according to figures obtained from the Central Bank of Nigeria.
Politics is also a key factor, as experts see politicians mopping up dollars for election primaries this month.
The President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, mentioned that the situation was caused by several factors, including elections, loss of confidence, and demand/ supply.
“It is a market where demand and supply determine the price. Do not forget that election years are associated with foreign exchange volatility, coupled with supply squeeze. External reserves, inflation, cost of inputs, and the Russia-Ukraine war are also key issues,” he said, arguing that there was indeed a loss of confidence, saying that “once people see the exchange rate rising, the confidence will also fall.”
