Naira hits all-time low of 351/$1 at interbank market

The naira fell to an all-time low of 350.91 to a single dollar at the interbank market on Friday morning.

According to Reuters data, the local currency traded at 350.91 to the dollar, in a single $1 million dollar transaction at the official market.

The currency began the day at 317.50 naira to the dollar on Friday, from about 320/$1 on Friday.

A total of only $2.01 million had been traded as of 12:43pm, with the market open for more trading.

Following the Central Bank of Nigeria authorisation for banks to sell foreign exchange (forex) to bureau de change operators, the naira firmed on Wednesday and Thursday, trading around 392 to the dollar.

The CBN authorisation permits BDCs to get $30,000 per week, to sell on the parallel market at a margin of two percent only.

The $30,000 bought via the interbank window is expected to be sold to end users seeking to fund any of medical travels, personal travel allowance, and fees for Nigerians schooling abroad.

CBN however restricts the sale of forex to $5,000 per transaction.

“Funds purchased by BDCs shall be disbursed for the following eligible transactions only. In all cases, maximum disbursement per transaction shall not exceed USD5,000.00,” CBN said in a statement.

Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), said the limit may not help, as some students pay as much as $30,000 in tuition outside the country, and $5,000 may not be enough for them.

As the naira strengthens on parallel market, the opposite may be the case at the interbank market, but analysts insist the gap between both markets would fall to below 10 percent by the end of 2016.