Naira depreciates further, exchanges for N980/$ at parallel market

The naira, on Wednesday, fell to N980 per dollar at the parallel section of the foreign exchange (FX) market.

The figure represents a depreciation of N50 or 5.38 percent compared to the N930 it traded on September 13.

Speaking with TheCable, currency traders, known as Bureaux De Change operators (BDCs), said the decline is largely due to the new exchange rate regime.

“This time, the rate is not affected by dollar scarcity; it is just a consequence of the new exchange rate regime,” a trader identified as Aliyu, told TheCable.

Operating in the Ikeja area of Lagos, the black market traders put the buying price of the dollar at N970 and the selling price at N980 — leaving a profit margin of N10.

Meanwhile, at the official market, the local currency depreciated to close at N776.6 on Tuesday, according to data from FMDQ Securities Exchange — a platform that oversees official FX trading in Nigeria.

Data from FMDQ showed that the market opened at N776.29 to the dollar, recording a high of N799.9 and a low of N720. 

A total of $71.01 million was traded at the investors’ and exporters’ window (I & E) window — Nigeria’s official trading window.

The naira has consistently experienced fluctuations since the Central Bank of Nigeria (CBN) implemented the currency float policy which now allows the exchange to be determined by market forces.

On September 12, the apex bank asked deposit money banks (DMBs) to stop utilising gains from the revaluation of the naira to pay dividends or finance operations.

A revaluation of a currency occurs when the value of a currency is increased relative to another currency in a fixed exchange rate regime.