Naira drops to at parallel market

Naira on Wednesday weakened against the dollar at the parallel section of the foreign exchange market.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to journalits in Lagos, said the local currency depreciated by N15 or 2.3 per cent to trade at N680 per dollar at the street market.

Last week, the Naira closed at N665 to a dollar at the street market.

The street traders put the buying price of the dollar at N665 and the selling price at N680, leaving a profit margin of N15.

They said scarcity has returned to the FX market.

“Demand is high, and there is no dollar. If you tell a customer to sell a dollar to you for N650, he will tell you that he saw it online for N670 or N675. We also have to make our gain. We are buying and selling to make a profit,” a trader at the Ikeja market said.

On the official market, the Naira appreciated by 0.52 per cent to close at N428.75 to a dollar on Tuesday, according to FMDQ OTC Securities Exchange, a platform that oversees foreign-exchange trading in Nigeria.

In the past week, the foreign exchange market witnessed appreciation after the Economic and Financial Crimes Commission (EFCC) raided a BDC hub in Abuja.

The anti-graft agency alleged that some BDC operators were mopping up foreign currencies, especially the dollar, to either hoard or smuggle the funds out of Nigeria.

As part of its efforts to check the rising incidence of FX speculation, the EFCC vowed to clamp down on persons and organisations hoarding foreign currencies across key commercial cities such as Kano, Lagos, Port Harcourt, Enugu and Calabar.

Recently, Bismarck Rewane, Chief Executive officer of Financial Derivatives Company, said the naira is overvalued by 200 per cent.

He projected that the official rate would be devalued next month.