Naira Tumbles To 515 As Dollar Scarcity Persists

The naira pared some of its recent gains against the dollar at the parallel market on Wednesday amid the lingering scarcity of the greenback in the country.

The local currency fell to 515 against the dollar at the parallel market from 510 on Tuesday.

The naira had strengthened to 506/$ on August 4 after plunging to 525/$ at the parallel market on July 28, a day after the Central Bank of Nigeria stopped foreign exchange sales to Bureaux de Change. It had been hovering around 508/$ and 510/$ in recent days.

The CBN Governor, Mr Godwin Emefiele, had on July 27, at the end of the Monetary Policy Committee meeting, announced the stoppage of forex sale to the BDCs, saying they had turned themselves into ‘agents that facilitate graft and corrupt activities of people who seek illicit fund flow and money laundering in Nigeria’.

He said the CBN would channel a significant portion of its weekly allocation currently meant for BDCs to commercial banks to meet legitimate forex demand for ordinary Nigerians and businesses.

At the Investors and Exporters’ window, the naira, however, strengthened by 0.02 per cent to close at 411.40/$ on Wednesday, according to FMDQ Group.

The PUNCH had reported on Monday that foreign exchange transactions at the I&E window declined by 17.2 per cent last week, citing data from FMDQ Securities Exchange Limited.

The total value of transactions at the I&E window stood at $489.85m last week, down from $590.34m the previous week.

The FMDQ data also showed that forex turnover at the window, where more than half of Nigerian forex transactions are traded, fell to $2.81bn in July from $3.01bn in June.

It said the total turnover in the forex spot and derivatives markets was $677.44m, representing a decrease of 24.93 percent ($225.01m) from $902.45m reported for the previous week.