Forex scarcity persists as naira tumbles to N930/$ at parallel market

Forex scarcity persists as naira tumbles to N930/$ at parallel market

Foreign exchange scarcity on Wednesday led to a further depreciation of the naira in the parallel market with one United States dollar exchanging for N930.
This is a fall from N925/$ which it exchanged mid last week.

The exchange rate however improved week-on-week in the Investors and Exporters (I&E) window to N758.1 from N775.6.

The prevailing exchange rates indicates a rising parallel market premium which is the gap between the parallel market rate and that of the I&E window as reported by the Vanguard.

The gap as of last week Wednesday was N153.41 per dollar, but it rose to N171.9 per dollar on Wednesday.
This is said to have created a huge incentive for round-tripping and arbitraging in the foreign exchange market ecosystem.
Market observers have also noted that the Bureau de Changes have not helped the market as envisaged a month ago when the segment was re-admitted into the Central Bank Of Nigeria’s official trading window for the purpose of opening it to more independent forex supply and better access for individual retail end users.
But the BDCs said the renewed depreciation of the local currency was mainly due to the scarcity of the foreign currencies.
The Vanguard reported a BDC operator as saying that the scarcity is so much that ‘‘even some Nigerians are unable to withdraw forex from their domiciliary accounts in banks”.
He said the lifting of the ban by the CBN on sales of forex to BDC operators had failed to help resolve the scarcity as the banks are not selling to the BDCs.