Again, Naira Depreciates On The Parallel Market, See Exchange Rate As Of Wednesday

The naira yesterday again depreciated sharply against dollar on the parallel market due to upsurge in demand for dollars importers travelling to China and the rest of the world.

It was reported that the parallel market exchange rate rose from N448 per dollar on Tuesday to close at N465 per dollar at the close of business yesterday, indicating N17 depreciation.

It was gathered that the market experienced upsurge in demand for dollars yesterday for end-users travelling to China for import business.

A bureau de change Chief Executive who spoke on condition of anonymity said that the number of end-users travelling to China for business purposes has been on the increase since the conclusion of the recent holiday season in China, adding these are the source of increased demand for dollars in the parallel market. He said that the situation is aggravated by the fact that most of the items to be imported are part of the 41 items excluded from the official foreign exchange market.

He, however, expressed optimism that the demand pressure may subside this week in view of the expected dollar sales to BDCs by the Central Bank of Nigeria tomorrow, especially given the increase in number of BDCs accessing the dollar sales from around 2000 to 3000.

The parallel market exchange rate had dropped from a high of N520 per dollar on February 20 to N448 per dollar on Tuesday in response to $1.12 billion supply into the foreign exchange market by the CBN.

Since Monday February 20, 2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has intervened in the forex market six times as follows: Tuesday February 21, $417 million; Thursday February 23, $231 million; Monday February 27, $180 million; Friday March 3, $350 million, Monday March 6, N367 million; and on Tuesday with $100 million.

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