Naira sinks to 480/$1 as scarcity returns

The Nigerian naira on Tuesday sank to 480/$1 as fresh forex scarcity hit the parallel market.

The depreciating naira also traded at 585 and 500 to the British pound and European Euro, respectively.

At the official side of the forex market, the local currency also depreciated against a resurgent US dollar, trading at 315.125 per dollar, according to the FMDQOTC trading quotes.

Bureau de change (BDC) operators who spoke to TheCable blamed  the scarcity of forex on the inability of commercial banks to provide stipulated weekly allocations for BDCs.

Others blamed it on the Department of State Services (DSS) on forex dealers and increase demand, as the country inches towards the Christmas and new year festivities.

DSS raided a number of forex dealers who sell above N400 to the dollar, in a bid to close the gap between parallel and official market rates, but with little success.

The Nigerian Law Reform Commission, on another hand, is seeking to jail dollar hoarders for up  to two years, while they may also forfeit 20 percent of the confiscated forex.

At the last monetary policy meeting, however, Godwin Emefiele, the CBN governor, said the CBN was not in support of a review of the Foreign Exchange Act to allow the jailing of Nigerians who keep their dollars.

“There is nothing in our current foreign exchange regulations that (says) people will be jailed or that their dollars will be confiscated,” Emefiele had said.

“I am saying here, and categorically, that if we are contacted or whenever it becomes an  issue for discussion, we would advise against the clause that forbids people from keeping their dollars, if they choose to or a law that says that people  should be jailed for keeping foreign currency.”

At the official side of the forex market, the naira traded for 315.125 to the dollar, also going at 390 and 331 to the pound and euro, respectively.