The naira weakened by 1.13 per cent against the dollar at the parallel market on Monday amid rising demand for hard currencies.
The local currency fell to 223 to the dollar at the parallel market, down from 220.50 to the dollar it recorded on Friday.
“The market is experiencing strong demand
for the dollar from some individuals and businesses stocking for school
resumption,” one trader said.
The naira had traded as low as 240 to the
dollar after the Central Bank of Nigeria listed some 41 items that
could not be imported at the official exchange rate.
It
strengthened after the CBN increased the supply of dollars to Bureaux
de Change operators, where importers were buying their dollars.
“The demand for the dollar is increasing
while some customers are willing to buy at whatever rate they can get,”
the President, Association of Bureau de Change Operators, Aminu Gwadabe,
said.
The naira, which traded at 198.50 to the
dollar on the interbank market earlier on Monday, closed at the 197 to a
dollar peg rate set by the central bank.
Last Monday, the naira dropped by 2.3 per
cent to 218 against the dollar at the parallel market. Forex traders
linked the development to huge demand for the dollar by importers,
politicians and investors.
Prior to this, the naira had hovered
between 208-210 against the dollar after the central bank increased
dollar sales to the BDCs in a bid to narrow the margin between parallel
and interbank market rates.
Some forex dealers said a number of
people were buying up dollars to pay school fees and other commitments
abroad, fuelling a surge in demand at the parallel market.
Gwadabe had observed that rumours of
further depreciation of the naira and likely stoppage of the CBN window
to the BDCs were also creating high speculation and artificial scarcity
in the forex markets.
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