Exchange rate may depreciates further, expert warns

Bureau De Change operators have warned that the exchange rate could depreciate further in the coming days if forex scarcity persists.

The exchange rate for travelers looking to buy dollars sold between N590 to N592 to the dollar for travelers who want to buy the greenback over the counter.

This is over N170 premium to the official NAFEX exchange rate which is used by the central bank to sell dollars to Nigerians seeking personal or business travel allowances.

According to some operators, the number of inward travelers selling dollars to them has reduced in comparison to outward travelers and is perhaps contributing to the scarcity.

International money exchange platform, Travelex displayed an exchange rate of N574/$1 and said it typically adds a premium of 2.5% taking its rate.

However, its cashiers sold at N592/$1. The same rate applies to other BDCs such as IBRO BDC, Bossy Clean Exchange, etc.

Some blamed the situation on the scarcity of physical dollars as the central bank no longer sells dollars to them. Cash transactions were also preferable for the BDCs, as they leveled a premium for transactions that were other than cash.

Naira gained against the US dollar during the week, recording a 0.5% appreciation to close at N417/$1 at the official Investors and Exporters Window on Friday.

The market only opened for three days, due to a national holiday declared by the federal government on Monday and Tuesday in Celebration of Eid El-Fitr.

A sum of $359.36 million was traded in the market during the week, compared to $788.44 million that exchanged hands in the previous week.

The exchange rate at the parallel market remained stable during the week, maintaining a rate of N590 to a dollar.