These are definitely not interesting times for the nation’s economy, particularly the national currency, the naira, no thanks to the depleting reserves and the subsequent banning of importers of 41 items from the foreign exchange market by the Central Bank of Nigeria.

Barely 10 days after the CBN stopped forex sale to importers of rice, textile and 39 other items, the naira on Wednesday crashed to 230 against the United States dollar at the parallel market, down from 218 recorded on June 23 when the new forex rule was introduced.

The policy, which has pushed huge forex demand from the interbank (official) market to the parallel (black) market and the Bureau de Change retail segment, has led to artificial scarcity of dollar and other major foreign currencies as operators now hoard them in anticipation of higher prices.

The naira had fallen to 220, 223, 226.5 and 228 against the dollar in the past one week. Black market and BDC operators, however, told our correspondent that serious dollar liquidity squeeze was already hitting the market and operators were no longer in possession of huge stock of forex to meet rising demands, especially from the importers of the banned items.

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Using the CBN figures, analysts had estimated that about $5.7bn quarterly forex demand was being transferred from the official interbank market to the black market. “The situation is getting critical now. There is serious dollar liquidity squeeze in the market now. The demand is overwhelming and both the black market and the BDC segment can no longer meet the demand,” a black market operator told our correspondent on Wednesday.

“The market is very volatile now as a result of the restrictions placed on about 41 items by the central bank. Most importers are now patronising the parallel market to source their dollars,” the head of a BDC, Mr. Harrison Owoh, told Reuters on Wednesday,.Meanwhile, the Association of Bureau De Change Operators has written to the CBN asking it to intervene in the dollar scarcity in the parallel market and the BDC segment to save the naira from crashing further.

In the letter, a copy of which was obtained by our correspondent, the association expressed its readiness to work with the CBN to stabilise the market. The letter, signed by association’s President, Alhaji Aminu Gwadabe, and Executive Secretary, Uduma Cletus, advised the CBN to increase its weekly forex sale to the BDCs from $30,000 to $50,000.

The body also asked the central bank to reintroduce the autonomous market where it could sell about $100,000 to the operators. Gwadabe told our correspondent that it was expedient for the CBN to increase its forex sale to the BDCs in order to stabilise the naira.

Some analysts believe the naira may hit 240 against the dollar in the coming days. However, the naira traded at 198.95 to the dollar at the interbank market on Wednesday, according to Reuters. The central bank had lowered its exchange rate peg to N196.95 to the dollar on Tuesday from N196.90 last week

Also, a trade of $735.74m went through on Nigeria’s interbank currency market at N198.45 on Wednesday, Thomson Reuters data showed. - See more at: http://www.exlinklodge.com/2015/07/naira-falls-to-230-dollar-supply-dries.html#sthash.Zejp54vn.dpuf



cc lalasticlala ishilove

The change is here in john cena's voice, but the mistake we did was not asking 4 the type of change they are gonna give us

am I the only one who thinks this is a spill over effect of the jonathan administration......the new government is only a month old, that mofo spent 5yrs plus

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