The disparity between the demand and supply of US dollars within banks and the informal parallel market continues to exert downward pressure on the value of the Nigerian naira.
Within three weeks, the Nigerian Naira lost N100 of its value from N860 per dollar to N960 on the parallel market on Friday.
Before the Central Bank of Nigeria adopted a flexible exchange rate system in June, the naira had been trading at 471/$ within the Investor & Exporter window. However, shortly after the local currency was floated, it declined to 664/$ the following day.
Naira now trades at N945 to a dollar on the parallel market the previous week while it reached a peak of 799/$ at the I&E forex window before concluding the day at 740.60/$ on Friday.
This trend has emerged as a consequence of dollar scarcity, with banks encountering challenges in meeting customer demands due to the insufficient supply of greenbacks.
“Some of the dollars are being repatriated through the banks but the demand is still higher than supply because everyone is still sourcing for dollar for imports, PTA, BTA, others,” an official of a lender, who chose to speak on condition of anonymity because he was not authorised to speak on the matter, said,
“Nigerians are still hoarding dollar, customers are still hoarding FX because they don’t trust the policy. Banks are not getting forex supply from the CBN regularly like before,” he added.
Also, an official of tier-1 bank, who pleaded anonymity, said, “Before, the banks used to get dollar from the CBN every week but now, it has reduced drastically; we have not been getting again. Banks are sourcing for forex everywhere. The banks don’t have enough. We have not been getting supply from the CBN for weeks now.”