- Naira Slides to N470 Against the Dollar
The Nigerian Naira slid to N470 against the US dollar on Wednesday, following reduced forex supply in the market.
The local currency which has been relatively stable after the central bank approved international money transfer agency, Travelex, to sell dollars directly to the Bureau De Change operators across the country declined from N455 to N470 against the US dollar on the parallel market.
While, on the interbank market the naira closed at N306.78 to the dollar on Wednesday.
According to traders, the introduction of money transfer agent was initially effective, but its impact has dropped due to low remittance coming into the country.
“What we get from Travelex is not sufficient,” a foreign exchange trader told Reuters, referring to low liquidity in the market.
In an effort to increase forex supply, CBN also approved First Bank of Nigeria Limited to complement Travelex effort by selling its forex remittance directly to Bureau de Change operators. Still, traders have said it’s not enough to cover economic demand for the US dollar.
Travelex sells $15,000 on a weekly basis to each of the 3000 BDCs in the country, but this is less than what is required to cover demand from both small businesses and individuals.
“The problem is not CBN, but the drop in the remittance coming into the country as the Naira appreciated, said Samed Olukoya, a Foreign Exchange Research Analyst at Investors King Ltd. But once, OPEC nations reach a consensus on production cut, the issue of liquidity should be addressed.”