In recent months now the naira has continued its free fall, against world's major currencies notable of all being the usd. Now the numerous FOREX policies has naturally aided the free fall of naira amidst pressures that naira be devalued. The president Muhammadu Buhari has reiterated his stands on non devaluation of naira, his reason being that Nigeria is not an exporting nation. The western countries can afford to devalue their currencies and yet not feel any negative impact because when a currency is devalued, manufacturers in the country who will have to export their product for FOREX will benefit but the importers will suffer. Hence any goods imported will be far more expensive than their locally manufactured counterpart. Nigerians being dependent on foreign product would suffer it most should these the CBN devalues naira.

The big question is, who is controlling the market right now? the CBN inter bank rate or the parallel market. The economic policies are meant to control the strength of naira. but how do you control what you don't have? The country's foreign reserve which it uses to hedge the naira is very low. And the country's major means of FOREX is at its lowest in over a decade. How will the CBN be able to control who the banks FOREX rate when it doesn't have much to sustain itself?

The banks right now through their correspondent banks buy Forex at an amount much higher than the CBN official rate, hence when they come they sale at their own rate which it closer to the parallel market rate.

So far I have used three banks to do my forex and these banks charged me differently.

Firstly was GTB. i used my GTB mastercard to pay for a domain name in godaddy.com at the time when the parallel market was N327 per $1 and GTB charged me N325 per $1. Secondly I used my Stanbic IBTC to pay for my facebook ad and they charged me N290 per $1 when rate was at N340.

Right no I was beginning to see it as a trend with mastercards. so I decided to use my Diamond Bank Visa for my hosting for 12 months, and when the debit alert came I almost wanted to faint. I was charge N330 per $1 while parallel market rate was at N360 per $1. I began to make inquiries and I got the information that CBN doesn't really have enough dollars for the commercial banks right now, hence the banks have to sought for their dollars and other major currencies themselves which when they get, as any business would want to make profit, they too would want to make profit from it. Right now the banks are the biggest beneficiaries of this naira free fall.

The gap between the black market rate and the “artificial” official exchange rate will keep widening, except either or both of these things continue:

until the bank adopted a more realistic policy or

the price of oil climbed and dramatically increased reserves.

On 31st December 2016 Talkasset made their prediction of the currency reaching N400 per $1 if not proper policies are put in place. Right now the CBN will need to call on banks and look into the situations on ground find out how they get their forex, try to put a realistic benchmark for the rate until their is increase in the price of oil which will automatically boast our foreign reserve.

God save Nigeria.

Source: http://www.talkasset.com/why-nigerian-banks-are-selling-forex-at-parallel-market-rate/#.Vsnix7QrLIV