Nigeria’s local currency, the naira, has set a new record, falling to its lowest against the dollar at the parallel market.
Currency traders in Lagos, also known as Bureaux De Change operators (BDCs), quoted the naira at N1,000 to the greenback at the street market.
The traders, on Tuesday, put the buying price of the dollar at N990 and the selling price at N1,000 — leaving a profit margin of N10 .
The figure represents a depreciation of N7 or 0.7 percent from the N993/$ it traded on Monday.
A BDC operator simply known as Atiku, in Ishaga, said he is selling the dollar at N1000; while Shehu, another street trader in Ogba, offered the same rate.
“Dollar is more expensive and scarce. In fact, if you are willing to sell, I will be willing to buy, even if it is at N990/$,” said a BDC operator at the Alade market in Ikeja.
At the official side of the market, the investors’ and exporters’ window (I & E), the local currency depreciated by 4.78 percent to close at N773.25 to the dollar on Monday.
According to details on FMDQ OTC Securities Exchange, a platform that oversees official FX trading in Nigeria, a total of $64.14 million FX transactions were made at the I&E window.
The last time the naira hit its lowest was on August 10 when it traded at N950.
Since the federal government decided to unify all trading windows into the I&E window, effectively floating the local current against the dollar, there has been a huge gap in rates obtained at the parallel and official FX markets as demand shifts to the former amid a liquidity crisis.
Analysts told TheCable that speculative activities are also behind the disparity in the rates.
They argue that the failure of the banks to supply an adequate amount of FX to alleviate pressure in the official market pushes demand to the open market.
To curtail the naira free fall, Wale Edun, minister of finance and coordinating minister of the economy, had said the country needs to address its $6.8 billion overdue forward payments, and shrinking reserves.
On his part, Aminu Gwadabe, the president of the BDC operators, said the BDCs are proposing consolidation to the Central Bank of Nigeria (CBN) to make it possible for them to access more FX.
He said obtaining forex has become difficult for some operators, so merging their resources would make it easier to have the liquidity needed to obtain FX.