- Dollar Scarcity Continues to Hurt Naira Value, Exchanges at N450/$
The Nigerian Naira declined further at the parallel market on Wednesday as dollar scarcity continues to dictate the local currency exchange rate.
According to traders at the parallel market, the Nigerian Naira declined by N5 from N445 it traded on Tuesday to N450 per US dollar as dollar scarcity persist.
On Tuesday, the Association of Bureau De Change Operators of Nigeria attributed the surge in the Naira exchange rate to dollar scarcity.
Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria, said: “The persistent dollar scarcity with shrinking liquidity in the market is one of the major unintended consequences of the shutdown of the BDCs window.”
The Central Bank of Nigeria had refused to resume the sales of forex to Bureau de Change operators across the country, saying they would have to wait until airlines resume operations.
This was despite the apex bank selling to deposit money banks for onward sales to parents looking to pay school fees and small and medium businesses.
Experts have said the central bank is protecting the foreign reserves, especially with revenue generation presently low and the reserves at about $34 billion.
The drop in global demand for crude oil and the inability of the federal government to find buyers for Nigerian oil continue to hurt the nation’s revenue generation and impacted CBN’s ability to intervene in the foreign exchange market.
The situation is expected to further weigh on the Nigerian Naira, push inflation rate above the current level given that Nigeria is an import-dependent economy, hurt new job creation and consumer spending.
