Again, Naira falls to 400 per Dollar, banks now selling forex

The naira plunged to 400 against the dollar at the parallel market on Thursday as shortage of foreign exchange continued to have negative effects on economic activities in the country.

The local currency had closed at 390 against the greenback on Wednesday. The shortage of forex at the interbank and the black market has continued to weigh on the value of the naira.


After closing at around 378 against the dollar for most part of last week, the naira dropped to 380 on Friday before falling to 382 on Monday.

The currency closed at 315.06 to the United States dollar at the interbank market on Thursday.

Economic and financial analysts have linked the wide depreciation in the value of the naira against the dollar at the parallel market to huge demand for forex by holidaymakers seeking to travel abroad.

However, some experts said the huge demand for forex at the parallel market was beyond the normal summer rush. CBN has directed banks to start selling forex to BDCs.

They linked the development to the activities of speculators and significant demand by manufacturers and importers whose demand was not being met at the interbank market.

Currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said, “The issue still has to do with inadequate forex supply. As far as you continue to have some 41 items banned from the interbank market, importers and manufacturers of those items will continue to seek for forex at the parallel market.

“This is part of the reason you are having pressure at the parallel market.”

The National President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, told Punch that the fall in the naira value could be linked to the activities of speculators.

He said the demand was spurious, saying it was not coming from genuine sources.

“The demand is spurious; the challenge is that there is no liquidity in the market. If you ask any of the parallel market operators calling N400 per dollar to bring the dollar that you want to buy it, they don’t have,” Ezun added.

The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said that if the naira continued to fall at the parallel market, the country would need to brace for higher rate of inflation and further contraction in economic growth. More troubles!