FREEPRESS – The naira on Monday depreciated in value to a record low of N347/$ at the parallel market following increased demand, which outstrips supply of foreign exchange (FX), according to investigation.
Specifically, the local currency lost N12 or 3.6 percent each at the autonomous and parallel markets.
After trading on Monday, the naira closed at N345/$ compared with N333/$ on Friday last week at the autonomous market. It closed at N347/$ as against N335/$ on Friday last week at the parallel market.
The development has resulted to increased pressure on the Central Bank of Nigeria (CBN), as it insists on measures that would boost supply of the greenback.
Ibrahim Muazu, Director, Corporate Communications Department, CBN, emphasised the need to boost FX supply in order to reduce the pressure on demand.
He told our correspondent that Nigeria needed to improve on its export and reduce some demand on foreign goods and diversify economy in such a way that the country could produce and consume locally made goods.
Responding to the argument on whether the CBN has increased the number of 41 items restricted from accessing forex to include travelling for health and education abroad, Muazu said clearly that the apex bank had not taken such decision.
Aminu Gwadabe, Acting President, Association of Bureau De Change Operators of Nigeria (ABCON), however called on the CBN to sanitize the entire segments of FX market.
“So many things are happening in the market. They should cleanse the entire currency market,” he told our correspondent. He noted that the CBN within two weeks supplied $130 million to only seven deposit money banks, adding that it suggest that there were malpractices going on at the forex market.
However, the naira gained N1.88k or 0.94 percent against the dollar at the interbank FX market. It closed at N197.47k/$ on Monday from N199.35/$ on Friday last week at the interbank FX market.
In line with recent trend observed in the Nigerian FX market, forex illiquidity has continued to see exchange rate depreciate at the less-regulated segments (BDC and parallel markets), as demand remains atop supply. Interbank liquidity declined by as much as N580 billion on Tuesday, after banks made provisions for a CBN currency auction held on Thursday.
The official (CBN) and interbank rates have remained stable at N197/$ and N199.10/$1, respectively, due to the subsisting fixed exchange rate policy of the CBN, while the spread between the official and the less regulated segments continue to widen, according to Afrinvest Securities Limited.
