Naira depreciates further to N410/$ at parallel market

BY EMEKA EJERE

Nigeria’s currency on Friday depreciated to N410 per one dollar at the black market after the Central Bank of Nigeria (CBN) suspended sales to Bureau De Change (BDCs).

With the current rate, naira has depreciated by N20 from N390 per dollar traded on Wednesday.

The dramatic change in price points to the volatility of the market as the dollar was reported to have sold for N395 in the parallel market.

The CBN had yesterday suspended indefinitely the sales of foreign exchange to the Bureau De Change operators. The CBN’s action was in response to a letter dated March 24, 2020, by the BDCs recommending the CBN to declare market holiday on its weekly bidding pending the re-opening of the nation’s borders and the control of Covid-19 (coronavirus).

The suspension according to the Association of Bureau De Change Operators (ABCON) was as a result of the shutdown or land, air and sea border by a lot of countries globally and as such has reduced the number of travellers and the demand for foreign exchange by travellers

The novel coronavirus and the crash in oil prices are having a huge effect on the global economy including that of Nigeria. The big drop in foreign exchange earnings with the resultant pressure in the country’s foreign reserve and the foreign exchange market is having a negative effect on the value of the naira.

Data from FMDQ show that at the Investors and Exporters (I&E) forex window on Thursday, the local currency deprecated by 1.39 percent to close at N385.53kobo per dollar. The naira weakened to 361 to the dollar on the official market, supported by the central bank.