Despite recent intervention of the Central Bank of Nigeria, CBN, in the inter-bank segment, the Naira continue falling in the parallel foreign exchange market, trading at N320 against the US dollar in the Bureau de Change, BDC, segment and about N322 in the street markets in States like Kano and Lagos.
This free fall represents over nine percent depreciation within the last 10 days. Operators explain that the reason for the drop was due to the huge scarcity in dollars brought about by the dwindling foreign exchange resources inflow into the economy and coupled with the exclusion of the Bureau De Change operators from accessing Nigeria’s forex market.
The massive depreciation came at the backdrop of over USD100 million injected into the inter-bank segment by CBN, keeping the rates stable at N197 and N199 to one US dollar in CBN and inter-bank rates, respectively. The apex bank, last month, banned them from accessing its official window, citing various infractions, including round tripping and hoarding of US dollars.
Black market operators said that since the apex bank stopped selling foreign currencies to Bureaux De Change, there have been acute shortages in the supply of the resources. The increased scarcity across the market segments was coming at a time it appeared there was demand surge coming from importers, who were unable to source from the CBN window, thereby putting pressure on the little resources available at the BDCs and street markets.
One of the BDC operators and President of BDC association in Nigeria, Aminu Gwadabe, who spoke to The Vanguard said: “We have demands coming from importers while dollar supply has dried up.”
Operators believe CBN’s intervention in the inter-bank segment would not be able to stem the slide in the value of Naira in the parallel market unless the apex bank increases its volume of foreign currency sales and possibly revert to daily sales instead of once in a week intervention. This claim fuels speculations that even the foreign currencies sold to banks by CBN find their way into the parallel market.