The Nigerian Naira depreciated to N737 against the United States Dollar at the parallel market, popularly known as the black market, on Thursday following the Independent Electoral Commission (INEC) decision to lift the ban on campaign activity.
Checks by Investors King showed that persistent dollar demand by politicians amid scarcity are two main factors impacting the exchange rate on the black market.
The President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, disclosed that elections, loss of confidence, and the force of demand and supply are what is driving the market at the moment.
“It is a market where demand and supply determine the price. Do not forget that election years are associated with foreign exchange volatility”, he noted.
A parallel market operator our correspondent spoke to in Abuja on Thursday evening quoted Naira at N737 to a dollar. This was different from what was quoted in the morning. The dollar was sold for N735 in the morning of the same day.
Abba Muhammed said he would buy dollars at the rate of N733 and sell at N737. It could be recalled that the dollar was sold at N728 on Wednesday.
Investors King understands that dollar was traded at N707 to a dollar at the beginning of September. This represents a difference of N30 (4.2 percent).
On the other hand, the dollar to naira exchange was significantly stable at the Importer and Exporter (I&E) Window at N430 to one dollar.
It is widely believed that political activities leading to the next year’s elections will further decrease the value of the naira against the dollar. Analysts opined that politicians will scramble to stack dollars ahead of the 2023 elections.
The electoral commission has fixed the 26th of February and 11th of March for the 2023 general elections.
Meanwhile, Nigeria’s forex reserves barely stood above $39 billion on Thursday which was a drop of about