Naira drops 0.3% to trade N607/$ at parallel market

The naira, on Tuesday, depreciated further against the dollar at the parallel segment of the foreign exchange (FX) market.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’ quoted the naira at N607 to the dollar at the street market.

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

The figure represents a depreciation of N2 or 0.3 per cent compared to the N605 it traded almost two weeks ago.

The street traders put the buying price of the dollar on Tuesday at N601 and the selling price at N607, leaving N6 profit margin.

Since the suspension of trading information by abokiFX — citizens have resorted to street traders for current parallel market rates of the local currency.

Though the parallel segment is more open to traders and businesses who need foreign exchange (FX), the Central Bank of Nigeria (CBN) has consistently maintained that it represents less than one per cent of forex transactions and should never be used to determine the exchange rate.

On the official market side, the local currency depreciated by 0.3 per cent to close at N421.25 to the dollar at the end of the last trading day (Friday, June 10), according to details on the FMDQ OTC Securities Exchange, a platform that oversees official foreign exchange trading in Nigeria.

An exchange rate of N444 to the dollar was the highest rate recorded within the day’s trading and a low of N413.

Recently, the Association of Bureaux De Change Operators of Nigeria (ABCON) urged the apex bank to use its members as a tool to stabilise the FX market.