On Thursday afternoon at the parallel market, the naira hit a record low of N950 to 1 USD. Compared to the N897 it traded for earlier this week, the amount implies a loss of N53, or 5.9 percent.
Operators of Lagos-based bureaux de change (BDC) who talked with TheCable said that there is a significant demand for foreign money in the street market. The street vendors, sometimes referred to as “abokis,” set the price of a dollar at N935 for purchase and N950 for sale, leaving a profit margin of N15.
The local currency is now being purchased at N920 per dollar and sold for N940 per dollar, according to currency merchants in Ogun state’s Agbara region.
“Dollar is scarce now. The rate keeps going up and I don’t even know why. Despite that, people are still coming to buy the little they can get,” Aliyu, A BDC operator in the market, told TheCable.
The local currency lost 3.28 percent of its value versus the dollar in the investors and exporters (I&E) window on Wednesday, according to FMDQ OTC Securities Exchange, a platform that monitors foreign exchange transactions in Nigeria. It closed at N782.38/$.
Before it closed at N782.38, the exchange rate for the day’s trade reached a high of N800 to the dollar. At the I&E window on Wednesday, deals totaling $60.26 million were registered.
The scope of the foreign currency market was interrupted by significant adjustments that the Central Bank of Nigeria (CBN) implemented in mid-June. The unification of all FX market sectors (enabling the local currency to freely float) and the reinstatement of the “willing buyer, willing seller” principle stand out among the measures.
Since the government unified the exchange rate windows, the naira has consistently experienced fluctuations at the official window and a surge in depreciation at the black market.
Last month, the Economist Intelligence Unit (EIU), an arm of The Economist of London, predicted that the Nigerian government would go back to a system where they have more control over the exchange rate.
The UK-based platform said the move would be taken to try and stop the naira from losing its value much further.
