The dollar exchanged at N600 on Monday at the parallel market, heightening fears of a further devaluation of the nation\u2019s currency.<\/p>\n
The rate at the Importers and Exporters Window was, however, N415.75 on Monday, widening the exchange rate spread to N184.25.<\/span><\/p>\n At Zone 4 in Abuja, which is the hub of the parallel market in the Federal Capital Territory, two Bureau de Change Operators,\u00a0 Mohammed Isa, and Abu Abdullahi, told The PUNCH that the rate was N599\/$ at 10am and 11.14am respectively.<\/span><\/p>\n However, the rates for both BDCs changed to N600\/$ when they were separately contacted at N3.13pm and N5pm respectively on Monday.<\/span><\/p>\n \u201cIf I reduce this by N1, I will not be able to make any profit,\u201d one of the two BDCs, Abu Abdullahi, said.<\/span><\/p>\n At the Lagos airport on Monday, a BDC operator, Adamu Haruna, told The PUNCH that the rate was \u201cN600\/$, no more, no less.\u201d<\/span><\/p>\n A BDC operator at Amuwo-Odofin in Lagos, Bala Usman, gave an initial rate of N598\/$ in the morning but changed to N599 at 2.53pm when contacted.<\/span><\/p>\n \u201cThe demand is increasing and the dollar is very scarce now,\u201d he said.<\/span><\/p>\n Naira has weakened in the parallel market due to increased speculations, falling external reserves, and low foreign exchange inflows into Africa\u2019s biggest oil producer.<\/span><\/p>\n The country\u2019s external reserves fell by $313m in March, according to figures obtained from the Central Bank of Nigeria.<\/span><\/p>\n Politics is also a key factor, as experts see politicians mopping up dollars for election primaries this month.<\/span><\/p>\n The President, Association of Bureaux de Change Operators of Nigeria, Alhaji Aminu Gwadabe, told The PUNCH that the situation was caused by several factors, including elections, loss of confidence, and demand\/ supply.<\/span><\/p>\n \u201cIt is a market where demand and supply determine the price. Do not forget that election years are associated with foreign exchange volatility, coupled with supply squeeze. <\/span><\/p>\n \u201cExternal reserves, inflation, cost of inputs, and the Russia-Ukraine war are also key issues,\u201d he said, arguing that there was indeed a loss of confidence, saying that \u201conce people see the exchange rate rising, the confidence will also fall.\u201d<\/span><\/p>\n The Director of Research and Strategy, Chapel Hill Denham, Mr Tajudeen Ibrahim, told The PUNCH that the issue in the foreign exchange market could be attributed to falling external reserves and uncertainty in the economy.<\/span><\/p>\n \u201cThe parallel market is speculative. One of the causes is the foreign exchange reserves. Secondly, there is no indication that Nigeria is going to see an inflow of foreign exchange that can underpin the FX reserves any time soon,\u201d he said.<\/span><\/p>\n \u201cThere is nothing like Eurobond. There are no indications for other borrowings, so there is no clear indication of inflows. This is also one of the reasons for what we see in the market,\u201d he said.<\/span><\/p>\n He explained that it was possible that the market was seeing an election-related demand.<\/span><\/p>\n He urged the Central Bank of Nigeria to devalue the naira to match the parallel market rate, while also managing the market to ensure that unforeseen circumstances did not happen.<\/span><\/p>\n On his part, the Chief Executive Officer of Centre for the Promotion of the Private Sector, Dr Muda Yusuf, urged the CBN to float the exchange rate market to provide clarity for investors and allow the market to be determined by the forces of demand and supply.<\/span><\/p>\n \u00a0Yusuf said the CBN\u2019s current approach would continue to deepen distortions in the economy,\u00a0 perpetuate round-tripping,\u00a0 fuel speculation, and suppress forex supply.<\/span><\/p>\n On the other hand, Nigeria is a deeply import-dependent economy, relying on crude oil for over 80 per cent of the foreign exchange.<\/span><\/p>\n The non-oil sector inflows are still 10-20 per cent and most of the export products are raw materials and agricultural commodities.<\/span><\/p>\n The Manufacturers Association of Nigeria said only a strong manufacturing sector could raise the productive capacity of the country, reduce importation and increase FX inflows from non-oil exports.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" The dollar exchanged at N600 on Monday at the parallel market, heightening fears of a further devaluation of the nation\u2019s currency. The rate at the Importers and Exporters Window was, however, N415.75 on Monday, widening the exchange rate spread to N184.25. At Zone 4 in Abuja, which is the hub of the parallel market in […]<\/p>\n","protected":false},"author":1,"featured_media":8218,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[132,133,4867],"class_list":["post-8217","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-dollar","tag-forex","tag-parallel-market"],"_links":{"self":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8217"}],"collection":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8217"}],"version-history":[{"count":1,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8217\/revisions"}],"predecessor-version":[{"id":8219,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8217\/revisions\/8219"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/media\/8218"}],"wp:attachment":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}