After appearing to have stabilised against the dollar across foreign exchange markets in recent days, the naira on Wednesday and Thursday fell to N465 per dollar at the parallel market from N463/$1 last week, traders said.
The local currency has been under pressure at the parallel market since the beginning of the year, due to foreign exchange scarcity occasioned by the slump in the price of oil (the commodity that accounts for about 90 per cent of Nigeria’s export earnings).
However, after rebounding from N477 per dollar to N440/$1 in early September following resumption forex sales to Bureaux De Change (BDC) operators by the Central Bank of Nigeria (CBN) on September 7, the naira gradually weakened to between N460/$1 and N463 per dollar on the parallel market.
The CBN had in March suspended its weekly sale of forex to the BDCs due to the suspension of international flights and other coronavirus containment measures announced by the Federal Government.
Analysts had predicted that the resumption of forex sales to the BDCs would not be sufficient to bolster the naira, especially on the parallel market, due to the back-log of unsatisfied demand for dollars and rising demand for forex, caused by the increase in economic activities in the wake of the gradual lifting of coronavirus restrictions.
Still, according to analysts at Coronation Research, the CBN’s dollar sales to BDCs ensured that the naira dollar (N/$) exchange rate had remained largely flat-until now- on the parallel market (N461 per dollar).
Traders attribute the naira’s weakening on the parallel market in the last two days to disruption in dollar supply to that segment of the forex market occasioned by the curfew imposed in some parts of the country.