Nigeria: Naira Weakens Further, Reaches 1,190/$ as Dollar Scarcity Persists

The Nigerian naira continues its decline due to the deepening scarcity of the dollar.

On Friday, the parallel market saw the naira open trading at 1,175/$ and close at 1,190/$, marking a further slide in its value. Just two weeks ago, the naira was trading at 1,100/$ on the parallel market.

Conversely, the naira appreciated slightly in the Investor & Exporter forex window, selling at 808.28/$ at the close of trading on Friday, as compared to 810.05/$ on the previous day, based on figures obtained from the FMDQ.

Jubril Mutiu, a BDC operator, stated, “On Friday, the price was 1,175/$, but we don’t even have it. It is not available right now.”

Adamu Afeez, another BDC operator, added, “We are looking for those to sell to us, but now, we don’t have the dollar to buy. If we don’t have one, we cannot sell.”

Ibrahim Abu, another BDC operator, mentioned, “We sold for 1,175/$ in the morning till afternoon on Friday. By 2 p.m., it was already selling for 1,190/$. It has been fluctuating. I don’t know what the rate will be on Monday.”

The naira’s ongoing devaluation traces back to the Central Bank of Nigeria’s (CBN) directive in June to allow the exchange rate to flow freely.

Before the naira was floated, it traded at 471.67/$ on the official market on the FMDQ and at 765/$ on the parallel market in June.

Dr. Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria, emphasized the importance of full participation by BDCs in the retail segment of the forex exchange market to achieve a stable, strong, and robust exchange rate in Nigeria. He called for cooperation from all stakeholders in addressing the challenges facing the nation’s forex market and the naira’s depreciation.

Gwadabe noted that while several measures by the apex bank aimed to bridge the exchange rate gaps and stabilize rates, the involvement of BDCs in finding solutions would be pivotal in achieving a highly liquid market and stable rates.

He also raised concerns about the market’s illiquidity and the presence of unlicensed forex dealers who engaged in speculative activities, negatively impacting the sub-sector’s reputation.