Ahead of yuletide, naira weakens to 570/$1 at parallel market

The Nigerian naira has weakened to N570 per dollar at the parallel market ahead of yuletide.

Black market traders in Lagos who spoke to TheCable on Friday put the buying price of the dollar at N565 and the selling price at N570.

This represents N10 or 1.8 percent depreciation compared to the N560 it traded about three weeks ago.

They attributed the decline to the demand for the yuletide season.

Over the past months, the naira has continued to struggle against the greenback.

On the official market side, the naira appreciated by 0.3 percent at the official market to open at N413.83 on Friday, according to data on FMDQ OTC Securities Exchange, a platform that oversees official foreign-exchange trading in Nigeria.

Recently, the World Bank criticised the foreign exchange (FX) policy of the Central Bank of Nigeria (CBN)

The Bretton Wood institution said the FX management system was too rigid — and it is driving inflation in the country.

“The government’s exchange rate management policies continue to discourage investment and fuel inflation,” it had said.

“Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.

“Pressure on the naira remains intense, and while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15 percent in March 2020, five percent in August 2020, and seven percent in May 2021), FX management remains too rigid to respond to external shocks.

“Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation.”

In July, the apex bank stopped dollar sales to Bureau De Change Operators (BDCs).