The Nigerian naira is witnessing a persistent decline as the dollar scarcity tightens its grip on the economy, according to reports from The PUNCH.
In the parallel market, the naira opened trading at 1,175 per US dollar and closed at 1,190 per US dollar on Friday. Just two weeks earlier, it was trading at 1,100 per US dollar in the parallel market.
However, there was a slight improvement on the Investor & Exporter forex window, with the naira selling at 808.28 per US dollar at the close of trading on Friday, compared to 810.05 per US dollar on the previous day, as reported by FMDQ figures.
Bureau de Change Operators have noted the scarcity of the dollar, making it challenging to provide forex to customers. Jubril Mutiu, a BDC operator, stated, “On Friday, the price was 1,175 per US dollar, but we don’t even have it. It is not available right now.” Another BDC operator, Adamu Afeez, expressed their predicament, saying, “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, highlighted the fluctuating nature of the exchange rate, stating, “We sold for 1,175 per US dollar in the morning till the afternoon on Friday. By 2 p.m., it was already selling for 1,190 per US dollar. It has been fluctuating. I don’t know what the rate will be on Monday.”
The naira’s devaluation has continued since the Central Bank of Nigeria ordered lending institutions to allow for a more flexible exchange rate in June. Prior to this, the naira was trading at 471.67 per US dollar on the official market and 765 per US dollar in the parallel market in June.
The President of the Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, emphasized the need for BDCs to play a more active role in stabilizing the exchange rate. He stressed that achieving a stable and strong exchange rate in Nigeria would require the full participation of BDCs in the retail segment of the forex exchange market.
Gwadabe urged cooperation from all stakeholders to address the challenges facing the nation’s forex market and the depreciation of the naira, noting that involving BDCs in the solution recipe would help achieve a more liquid market and stable rates.
He also expressed concerns about market illiquidity and the presence of unlicensed forex dealers involved in speculative activities, which negatively affect the sector’s image.
