Naira drops at parallel market as forex scarcity persist

The Naira depreciated on Tuesday at the parallel segment of the foreign exchange market against the U.S (United States.) dollar selling at N462 to $1 compared to N460 against the dollar on Monday.

Victor Silas, an Investment analyst explained that the downward pressure seems to persist at the black market due to the limited forex supply at the I & E window. He said,

“With the prolonged limited FX supply to the market, investors and corporates unable to get dollars at the I & E windows will result in the parallel market. As more shortage of FX supply is prolonged and unable to meet demands.

“Rates in the parallel market will remain under pressure and we might see it above the N460 /$ levels it is currently trading at.

At this point, Nigeria’s central bank needs to restore confidence and provide more FX for legitimate transactions.”

However, Aminu Gwadabe, president, Bureau De Change Operators of Nigeria (ABCON (Association of Bureau De Change of Nigeria)) explained recently that Bureau De change operators will resume fully as soon as restrictions placed on air travels and international airports are lifted.

He said the return of the operators will help stabilize the naira and reduce the impact of currency hoarders and speculators.

“I, therefore, want our members and the General public not to engage on panic buying as anytime soon fingers might be burnt from such behaviours,” he said.