The free fall of the Nigerian currency, the Naira against the dollar in the parallel market is still running. Although the official exchange rate of the Naira to the dollar is N196, the rate at the unofficial exchange market is currently N235 to the United States’ dollar.
Aminu Gwadabe, president, Association of Bureaux De Change Operators, attributed the decline in the exchange rate of the Naira to the dollar to people’s desire to hold the dollar to protect themselves against further Naira weakness.
In addition, the fall of the Naira accelerated since the Central Bank of Nigeria (CBN) excluded some items from the official foreign exchange market and asked their importers to fend for themselves.
The Naira, which was selling at N218 before the new forex rule, had been dropping steadily against the dollar since then.
Analysts had predicted that the Naira might fall to N250 against the dollar if the current demand pressure persisted.
Godwin Emefiele, governor of CBN, had on Wednesday said the central bank’s forex rules were yielding results as the external reserves had started to recover gradually.
The naira, however, ended at 196.95 on the official interbank market on Thursday. The local currency had fallen to 233.5 earlier in the week.
By Dike Onwuamaeze