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 market.
Since June 23 when the new forex rule
became operational, the naira has fallen by
10.5 per cent from 218 to 241 against the
greenback.
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-denominated
assets.
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.
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