The naira has lost N17 to close at N522/$1 at the parallel market, a day after the Central Bank of Nigeria (CBN) stopped dollar allocation to 5,300 licensed Bureaux De Change (BDCs).
The local currency, which exchanges at N410.16/$1 at the official market, had closed Tuesday at N505/$1 on the parallel market.
A BDC trader in Ogba, Lagos, Hassan Ibrahim, said the rate depreciated from N505/$1 in the morning to N515/$1 in the at midday before closing at N522/$1 selling rate.
He said the BDCs buying rate closed at N515/$1 from N500/$1 traded on Tuesday.
Investigations showed that pressure on the naira intensified after manufacturers and foreign exchange end-users scrambled for scarce greenback to meet their business and personal needs.
Forex users preference for BDCs over banks have been linked to tedious documentation process and different levels of approvals required to purchase dollars from banks, which are usually not met at short notice.
Findings showed that request for dollar purchases at commercial banks’ branches are usually approved at the headquarters before 12 noon.
All requests not approved before the end of cutoff time will wait till the next business day.
Hence, many forex users in urgent need for dollars usually approach BDCs for quick purchases instead of waiting for the next business day. (The Nation)