Naira continues free fall, weakens 0.9% to N577/$1 at parallel market

The Nigerian naira has weakened to N577 per dollar at the parallel section of the foreign exchange market.

This represents N5 or 0.9 percent depreciation compared to the N572 it traded last week.

Street traders at the black market in Lagos who spoke to TheCable on Tuesday quoted the buying rate of the greenback at N572 and selling price at N577 per dollar.

A parallel market (street market) is characterised by noncompliant behaviour with an institutional set of rules.

The Central Bank of Nigeria (CBN) has consistently maintained that the parallel market represented less than one percent of foreign exchange (FX) transactions and should never be used to determine Nigeria’s naira/dollar exchange rate.

On the official market side, the naira appreciated by 0.16 percent to close at N416.67 to a dollar on Monday, according to data on FMDQ OTC Securities Exchange, a platform that oversees official foreign-exchange trading in Nigeria.

Last week, Godwin Emefiele, CBN governor, said the apex bank will stop the sale of foreign exchange to commercial banks by the end of the year.

He said banks must begin to source their forex from export proceeds.

“The era is coming to an end when, because your customers need $100 million in foreign exchange or $200 million, you now want to pack all the dollars and pass it to CBN to give you dollars,” he had said.

“It is coming to an end before or by the end of this year. We will tell them don’t come to the Central Bank for foreign exchange again go and generate their export proceeds.”

The apex bank had, in July 2021, stopped dollar sales to earlier authorised Bureau De Change (BDC) operators.