The naira is seen depreciating further and may hit the 500 mark to the United States dollar at the parallel market next week as the greenback scarcity persists and the Central Bank of Nigeria cuts supply to foreign exchange operators.
The local currency was trading around N495 to the dollar on the black market yesterday, compared to 485 per dollar last week due to dollar shortages.
The naira was quoted at 310.5 to the dollar on the official interbank window on Thursday by commercial lenders
“There is an acute shortage of dollars in the market because of supply being slashed by half to Bureau de Change operators from international money transfer agents, pushing the naira down,” one trader told Reuters.
The BDC operators are now getting $8,000 each per week from Travelex against the usual $15,000 each per week.
The naira had tumbled against the dollar to 490 on Monday from 487 last Friday, as acute shortage of the greenback continued to batter the economy and the country’s foreign exchange markets.
Before falling to 487 last Friday, the local currency had consecutively closed flat at 485 for four days in the previous week.
The severe shortage of the dollar has put the naira under persistent pressure at both the official and parallel forex markets.
The global crash in the prices of crude oil, Nigeria’s main forex earner, has brought untold hardships on Nigerians.
Economic and financial experts said unless the lingering dollar supply problem abated, the volatility in the exchange rate and the consequent economic challenges might continue.
“The challenge with the forex market is still the supply issue; price (exchange rate) is determined by the interplay of demand and supply,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had said.