Nigeria’s currency, Naira has dropped four points to slip to an all-time-low rate of N418/$1 at the parallel market, this afternoon, August 30.
The local currency started the new week at N414 against the greenback at the parallel market on Monday, after closing at 412/dollar on Friday, August 26.
But according to a Lagos Bureau De Change operator in Lagos, the Naira has slipped further down to trade at N418/$1.
Forex dealers said the demand pressure on the dollar, mounted by summer travellers and parents paying schools fees of their children studying overseas, was exacerbated by the CBN’s forex ban on the nine lenders.
The currency dealers said the naira started falling after the CBN banned the lenders from forex transactions.
Forex traders said even though the CBN had continued to sell dollars daily on the interbank market, its efforts were considered weak and inadequate, Reuters reported.
The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said, “There is nothing in the policy environment that will arrest the decline unless the central bank has increased capacity to supply the market, which unfortunately it doesn’t have. So, we should expect the naira to remain under pressure in the coming week.”
He said for the naira to stabilise, there must be a funding that the Federal Government or the CBN could access, such as a credit support from either the World Bank or a trading partner like China.
Chukwu said, “The decline of the naira against the dollar is beyond the recent suspension of some banks from the forex market. We have witnessed suspension of banks in the past, and it did not lead to any spike in exchange rate. The major challenge we have now is supply shortage. If that improves, naira will stabilise.”