The naira was flat at N500/$1 on the parallel market yesterday, 48 hours after the Central Bank of Nigeria (CBN) weakened the local currency for the third time this year as it tries to curb demand for dollars amid falling external reserves
occasioned by sharp drop in price of oil as well as the impact of coronavirus crisis.
In a circular it issued to dealers at the weekend, the apex bank announced that it had adjusted the rate licensed Bureau De Change (BDC) operators can sell the naira to N392 per dollar from N386 previously.
It also said traders would purchase the dollar at N390/$1 from N384 per dollar, adding that international money transfers would be exchanged at the banks at N388 per dollar from N382/$1.
Data obtained from “Abokifx,” a website that tracks forex rates on the parallel market, showed that the naira had been stable at N500 per dollar since Saturday.
The naira has been under pressure on the parallel market since the beginning of the year, due to foreign exchange scarcity occasioned by the slump in the price of oil (the commodity that accounts for about 90 per cent of Nigeria’s export earnings).
However, after rebounding from N477 per dollar to N440/$1 in early September, following an announcement by the Central Bank of Nigeria (CBN) that it would resume the sale of dollars to Bureaux De Change (BDCs) on September 7, the naira gradually weakened to between N460/$1 and N463 per dollar on the parallel market.
The CBN had in March suspended its weekly sale of forex to the BDCs due to the suspension of international flights and other coronavirus containment measures announced by the Federal Government.
According to analysts, the yearly Christmas season import bill pressure, which usually starts around this time of the year, is having a more devastating impact on the naira than usual currently, due to a surge a demand for dollars on the parallel market.
A forex dealer, who did not want to be named, told New Telegraph that despite the CBN’s interventions in the official forex window, only very few importers are able to access dollars, thus pushing them to the parallel market and increasing demand for forex in that segment of the market.