Black market rides on banks’ stressful documentation to push exchange rate to 515/$

The Central Bank of Nigeria (CBN) liquidity push to commercial banks has failed to keep the demand pressure away as Naira falls to N515/$ in the black market.

The CBN in the last two weeks has channeled a significant portion of its weekly allocation currently meant for BDCs to commercial banks to meet legitimate forex demand for ordinary Nigerians and businesses.

However, the process at the commercial banks has seen more Nigerians and businesses patronizing black market for easy access to forex.

This was captured in a recent report by analysts at Financial Derivatives Company Limited led by Bismarck Rewane.

The report described the documentation process required by banks for the sale of foreign exchange as cumbersome.

Seeing this gap, street currency traders took advantage of the demand pressure to hike the price of the foreign currency to N515/$1 in contrast to N510/$1 they sold it at the previous session.

Read also: Black market pushes exchange rate to N510/dollar

However, against the Pound Sterling and the Euro, the Naira closed flat at the parallel market yesterday at N703/£1 and N596/€1 respectively.

While at the Investors and Exchange (I&E) window, the official market Naira beat the pressure to close stronger against the US Dollar.

Data from FMDQ showed during the trading session, the day closed at N411.50/$1 compared with N411.60/$1 it was exchanged on Tuesday.

This happened as the market turnover window rose by 8.1 per cent or $9.9 million to $132.42 million against the $122.52 million on Tuesday.

This means that as of yesterday’s close, the difference between the official market and unofficial market dollar exchange rates had risen to N103.5 from N98 in the previous three trading sessions.

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