FOREX MARKETSMARKETSTOP STORY

Naira falls to N368 as Dollar scarcity continues

Niyi Olaoye

The naira fell further to N368 against the dollar at the parallel market Today (Tuesday), as the scarcity of foreign exchange continued to weigh on the value of the local currency at the interbank and parallel markets.

It will be recalled that the Naira closed at N365 to the dollar at the parallel market on Monday.

The local currency also dropped against the greenback at the interbank official market to 285 per dollar on Tuesday. The naira has fallen consistently at the interbank market this week, a development that is reflected in the volatility it has recorded at the parallel market.

Foreign exchange dealers told Business247 News Online that a huge volume of demand was moving from the interbank market to the parallel market due to the forex supply gap at the interbank market.

Aminu Gwadabe, the National President, Association of Bureau De Change Operators, while reacting to the issue on phone said; “It is a supply and demand market. A lot of demand is being pushed to the parallel market due to the shortage at the interbank market; it appears that the interbank market is being rigged,” He also added that there is the need to really douse the tension.”

Currency analysts said they believed that the spike would continue till the end of July unless the CBN took action to address the supply gap at the interbank market

While speaking with Mr. Kingsley Erabo, a top player at the interbank market, he noted said:  “The flexible exchange rate policy that commenced a few weeks ago is a good move by the CBN. However, the N280/dollar level where it started was not a true reflection of the value of the naira.

“This is why the foreign portfolio investors, who can bring forex liquidity to the interbank market, are not coming into that market. The CBN should have allowed the market to start around N300/dollar.”

The naira, which closed at 365 against the greenback at the parallel market last Friday, climbed to 365 on Monday before plunging further to 368 Tuesday.

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