The Nigerian naira continues its downward trajectory due to a growing scarcity of the US dollar.
On Friday, at the parallel market, the naira opened trading at 1,175 naira per dollar and closed at 1,190 naira per dollar, marking a significant decline from its rate of 1,100 naira per dollar just two weeks prior.
In contrast, there was a minor appreciation observed on the Investor & Exporter forex window, where it concluded trading at 808.28 naira per dollar on Friday, slightly up from 810.05 naira per dollar on Thursday, according to data from the FMDQ.
Some Bureau de Change Operators highlighted the dollar’s scarcity, stating that they were struggling to acquire sufficient foreign exchange to offer to customers.
For instance, BDC operator Jubril Mutiu mentioned that they did not even have dollars available at the rate of 1,175 naira per dollar.
This scarcity caused the exchange rate to fluctuate during the day.
The depreciation of the naira is a consequence of the Central Bank of Nigeria’s decision to permit a more flexible exchange rate in June, which has seen it trade at 471.67 naira per dollar on the official market on the FMDQ and 765 naira per dollar on the parallel market.
Dr. Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria, emphasized the need for full participation of BDCs in the retail segment of the forex exchange market to achieve a stable and strong exchange rate in Nigeria.
He acknowledged the challenges faced by the nation’s forex market and the depreciating naira, calling for cooperation from all stakeholders.
Gwadabe stressed that reversing the trend of naira depreciation and fortifying the local currency would require collaboration, with BDCs playing a crucial role.
He emphasized that, like other market segments, market illiquidity remains a significant concern for the BDC sector and expressed dissatisfaction with unlicensed forex dealers who engage in speculative activities and tarnish the sub-sector’s reputation.
