Confusion as Naira Slumps to N452/$ on Parallel Market

Obinna Chima

The naira continued to plummet on the parallel FX market yesterday as it fell to N452 to the dollar, lower than the N445 to the dollar from the previous day as demand for the greenback continued to outweigh supply.

The spot rate of the naira also fell on the interbank FX market to N312 to the dollar, compared with the N308 from the previous day.

Some currency analysts blamed the performance of the naira on the parallel market on the activities of currency speculators.

“The situation is gradually getting out of control. For me, you can’t give what you don’t have. Nigeria’s dollar receipts has dropped significantly and the Central Bank of Nigeria (CBN)does not manufacture dollar, it earns dollar. And our dollar receipts have reduced significantly. So, we are in a dilemma.

“Another factor responsible for what is happening on the parallel market is that a lot of importers involved in the importation of those 41 items that were banned are also sourcing for FX to import those items for the normal end of year sales, “a currency analyst who pleaded annonymous said.

He, however expressed optimism that once the central bank finalise its arrangement for Travelex to be selling dollars directly to bureau de change operators (BDCs), normalcy might be restored in the market.

The President, Association of Bureau De Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe, had argued that the current rate of the naira on the parallel market was not a true reflection of the value of the currency. He also attributed the development to the activities of speculators.

According to him, the situation in the parallel market was being driven by speculators taking advantage of the poor implementation of the CBN policy requiring banks to sell dollars to bureau de change operators.