The Naira has lost a whopping N100 in three weeks after sliding from 860/$ to 960/$ at the parallel market as of Friday.
The naira has been on a free fall since it was floated against other global currencies in June by the Central Bank of Nigeria. Before then, the local currency traded at 471/$ at the Investor & Exporter window.
On June 13, a day after the regulator floated the local currency, the naira traded at 664/$.
The fall has been more significant at the parallel market.
After crossing the N900/dollar ceiling at the parallel market last week, the local currency tumbled to 925/dollar in Lagos according to The Punch.
On Friday, the naira reached a high of 799/$ before closing at 740.60/$ at the I&E forex window. However, at the parallel market, the naira closed at 930/dollar in Lagos and 960/$ in Abuja at the parallel market.
Experts are attributing the fall to an acute shortage of the dollar. Banks and Bureau de Change operators are complaining of not having enough dollars to meet demand.
Bank officials said the CBN’s removal of cash deposit limits on domiciliary accounts in June had led to the repatriation of funds through the banks.
As a result, he said the demand for the dollar had outweighed the supply significantly.
“Some of the dollars are being repatriated through the banks but the demand is still higher than supply because everyone is still sourcing for dollars for imports, PTA, BTA, others,” an official of a lender, who chose to speak on condition of anonymity because he was not authorised to speak on the matter, said,
“Nigerians are still hoarding dollars, customers are still hoarding FX because they don’t trust the policy. Banks are not getting forex supply from the CBN regularly like before,” he added.
Also, an official of tier-1 bank, who pleaded anonymity, said, “Before, the banks used to get dollar from the CBN every week but now, it has reduced drastically; we have not been getting again. Banks are sourcing for forex everywhere. The banks don’t have enough. We have not been getting supply from the CBN for weeks now.”
