The naira hit another record low of 241 against the dollar at
the parallel market on Monday as the Central Bank of
Nigeria’s restrictions on foreign exchange sale fuelled
unofficial trade in dollars, Reuters reported.
The ban on importers from accessing the Nigerian foreign
exchange markets for the importation of 41 items had led to
the volatility of the naira-dollar exchange rate at the black
Since June 23 when the new forex rule became operational,
the naira has fallen by 10.5 per cent from 218 to 241 against
Foreign exchange dealers said the artificial scarcity of the
United States currency still pervaded the market.
The new forex rule had led to huge demand at the parallel
market, causing dealers to hoard the dollar in anticipation of
further fall in the naira
Economic analysts had said the CBN needed to devalue the
naira to allow the local currency achieve an equilibrium
price against the dollar.
The central bank had however said it would not be focusing
on the thinly-traded parallel market when determining the
exchange rate, adding that people preferred to use the
unofficial market for undocumented transactions.
Foreign investors had been on the sideline, waiting for the
CBN to devalue the naira before investing in naira-
Local and foreign analysts had predicted that the naira
might hit 250 against the dollar at the parallel market any
time soon if the artificial scarcity trend continued.
The central bank appears to be in a fix as the spread
between the official and parallel market continues to widen
by the day.
Meanwhile, stocks fell to a more than three-month low and
the naira on Monday, Reuters reported.
The local bourse, which has the second-biggest weighting
after Kuwait on the MSCI frontier market index, dropped for
the ninth consecutive day as investors shed banking,
consumer and oil shares.