Dollar scarcity pushes Naira to 352

The acute scarcity of foreign exchange, especially the United States dollar, has made the Naira fall further to 352 against the greenback at the parallel market.

Foreign exchange dealers said the increasing pressure on the naira is caused by high demand for the dollar by importers and speculators.

The local currency had weakened to 345 at the parallel market on Monday, having hit 338 last Friday as importers scrambled for the dollar to meet overseas obligations

The official rate however remained at 197 to the dollar.

Nigeria’s government is concerned that further depreciation will hurt poor Nigerians, but the bank’s refusal to revise the pegged exchange rate has widened a chasm between official rates and the parallel market.

Last month, the Central Bank of Nigeria banned dollar sales to BDC operators, sending the naira to record lows at the black market, and later stopped daily sales to the interbank market, in an effort to conserve the external reserves, now at their lowest in more than 11 years.

The nation earns around 90 per cent of its foreign exchange earnings from crude oil exports. The foreign exchange reserves fell to $27.83bn as of February 12, data from the CBN website showed.

Reuters reported quoting forex traders, some retail currency operators have few dollars in their vaults and depend on other members to fill orders when they have excess demand, fuelling the weakness in the currency.

The currency hit a then record low of 338 against the greenback on Friday, a day after the Bankers’ Committee announced that it might stop providing foreign exchange for school fees and medical bills payment.