The acute scarcity of foreign exchange, especially the United States
dollar, made the naira to fall further on Tuesday to 352 against the
greenback at the parallel market.
The increasing pressure on the
naira is caused by high demand for the dollar by importers and
speculators, foreign exchange dealers said.
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 central bank has left its official rate unchanged at N197 to the dollar on its interbank window.
“Most
individuals who sell (dollars) to us are no longer willing, but demand
is piling up,” the acting President, Association of Bureau De Change
Operators, Aminu Gwadabe, told Reuters on Tuesday.
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.
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, Reuters reported quoting forex traders.
The naira has depreciated by over 13 per cent in less than two weeks.
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.
The
naira, which has been on a free fall in the past few weeks, depreciated
steadily from 310 last week Monday to 335 on Thursday at the parallel
market.
“The current naira-dollar exchange rate is artificial; it
is as a result of the negative perception about the naira and the fear
that it may be devalued,” Gwadabe said.
President Muhammadu
Buhari is concerned that further depreciation will hurt poor Nigerians,
but the CBN’s refusal to revise the pegged exchange rate has widened a
chasm between official rate and the parallel market.
The Chief
Executive Officer, Economic Associates, Dr. Ayo Teriba, said there were
several ways the Federal Government could attract forex into the country
to stabilise the naira, stressing that the currency needed not be
allowed to depreciate to the current level.
Teriba said, “Saudi
Arabia has started attracting foreign investments. The country opened an
Initial Public Offer that banks were falling on one another to buy.
Nigeria seems not to be doing something. I don’t think that Nigeria
needs to allow the naira to be this weak; we are not helpless, we can do
something.
“This is 2016 and not 1986, 1992 or 1995; the
conditions are not the same. The global environment has liquidity now
that Nigeria can attract. The situation is not like 1986 when the global
environment was tight.
“Nigeria has investment opportunities; we
have the largest population in Africa, we are the biggest oil exporter
in Africa. I have told you that I don’t think that we need to borrow to
build infrastructure. We can open critical sectors like rail and power,
among others, and you will see the huge forex that will come into the
country.”