Naira tumbles to 905/$ at parallel market as demand for dollar peaks

By Sodiq Adelakun

Despite measures  by the central bank to narrow the gap between official and parallel  market rates, Nigeria naira, yesterday tumbled to N905 per dollar at the parallel section of the foreign exchange market.

Naira continued its depreciation against United State dollar on Thursday, exchanging at N905 to a dollar at the parallel segment of Nigeria’s foreign exchange (FX) market.

Despite the announcement of operational mechanism for Bureau De Change (BDC) Operations in Nigeria by the Central Bank of Nigeria (CBN).

It was observed that the parallel market FX dealers were yesterday, August 24 buying dollar at N895 while selling at N905, according to data by AbokiFX, an online platform that tracks the exchange rate on the parallel market.

Before now, the naira had at the parallel market remained flat at N900/$ while at the I&E window it dipped to N773.42/$.

“In the bonds space, investors remain bearish notably at the mid-long ends of the market, due to rising uncertainties over the country’s precarious FX situation as well as the recent pause in fiscal reform direction,” said Lagos-based Vetiva analysts in their August 21 fixed income report.

“It appears that the temporary reprieve the naira saw following the announcement of the $3billion Afreximbank loan, is starting to dissipate,” they added.

Recall that CBN said among others that the spread on buying and selling by BDC Operators shall be within an allowable limit of -2.5 per cent to +2.5 per cent of the Nigerian foreign exchange market window weighted average rate of the previous day.