Nigeria’s currency weakened to a four-year low in the parallel market despite the efforts by the Central Bank of Nigeria, CBN, to make banks sell more dollars to customers failed to bridge the widening gap between the official and street rates.
According to a Bloomberg’s report, citing abokifx.com, a website that collates foreign exchange market information parallel market dealers were offering the naira at N502 per dollar yesterday, up from N500 last week, the weakest since February 2017.
The rate widens the spread between the official and the parallel market rate to 22 per cent, when compared with the spot rate of N411.13 a dollar as at yesterday afternoon.
The report further noted that Nigeria, has devalued its currency thrice since March last year as lower oil income, which accounts for about 90 per cent of dollar earnings put pressure on external reserves.
“Some people are switching their naira savings into dollars fearing further devaluation”, the report noted.
Quoting CBN’s spokesman, Osita Nwanisobi, Bloomberg noted that the regulator met with banks’ Chief Executives last week over the issue with the lenders agreeing to increase dollar supply and operate special accounts to meet the requirements of businesses and travellers.
The Central Bank aims to use lenders to make more foreign currency available to buyers, at around the official rate of between N410 to N412 to the dollar to reduce pressure on the streets where rates are crashing from excess demand.