The Nigerian Naira Tuesday plummeted to its weakest point since February 2017 at the parallel market amidst exacerbating dollar crunch induced by the central bank’s tightening of supply and a two-week market holiday announced by street Bureaux de Change.
Naira exchanged at N415 to a dollar according to abokiFX.com, an exchange rate platform, monitoring rates across Lagos.
At the official spot market, Naira traded at 386.41 per dollar at 4:15pm in Lagos, its highest in 24 years, Bloomberg said.
It said it was probable that Naira could be devalued once more in the aftermath of the steep fall in oil prices even after the central bank weakened it by 4% not long ago.
“The fact of central bank stopping sale of dollars to BDCs to contain the spread of coronavirus caused some scarcity in the market. People are buying dollars to keep, thinking when things become normal they’ll gain,” Abubakar Mohammed, chief executive officer of Forward Marketing Communications bureau de change told Bloomberg.
The Central Bank of Nigeria (CBN) sold over $12 billion to currency exchange operators in 2019 alone.
“Bureau de Change account for 30% of foreign exchange transactions and if supply is not coming from there, even people with dollars will hoard.
“The foreign reserve is not at a comfortable level. If the major source of accretion is now pressured, exchange rate will feel the pain and the situation will worsen,” said Robert Omotunde, Afrinvest analyst.