The value of the naira continued to diminish at the parallel market as the local currency fell to a record low of N357 to the dollar on Wednesday, with demand for foreign exchange outstripping declining supply.
The value of the naira has so far, within the year, dropped by 34 per cent at the parallel market from N265 which it sold in January, although the value remained stable at N197 to the dollar at the official Central Bank of Nigeria end of the foreign exchange market.
The end of dollar sales to bureau de change (BDC) operators, a declining foreign exchange reserves and speculations that the CBN will halt dollar sales for school fees and medical tourism, as well as the low price of crude oil at the global market have been the factors behind the declining value of the currency at the black market.
The external reserves of the country have continued to decline, dropping to $27.81 billion by February 15, 2016. The price of crude oil had risen to $32.32 per barrel from around $28 per barrel after talks between Saudi Arabia and Russia to cut output.
Some retail currency operators have few dollars in their vault and depend on other members to fill orders when they have excess demand, fuelling the weakness in the currency, traders say.
Acting President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, noted that “most individuals who sell to us are no longer willing, but demand is piling up.”
Meanwhile, overnight lending rates of the Nigeria Interbank Offer Rates (NIBOR) rise to 4.0800 per cent from 3.9567 per cent which it had dropped to on Tuesday. Likewise, six months’ rates rose to 11.5007 per cent from 11.4530 per cent. One month and three months rates however dropped to 8.1289 and 9.8072 per cent Wednesday from 8.2498 and 9.9500 per cent.
-Leadership