The Nigerian naira tumbled against the United States dollar in the parallel market on Wednesday, ultimately closing at 900 naira per dollar.
This decline occurred just two weeks after the local currency was trading at 960 naira per dollar in the black market. Despite recent gains, the naira’s value began sliding again due to the persistent shortage of US dollars in the black market.
Earlier this week, the naira had been trading between 850 naira and 880 naira per dollar. However, on Wednesday, it saw a further decline not only in the parallel market but also in the Investor & Exporter (I&E) window, closing at 773.42 naira per dollar. The previous day, the naira had closed at 757.10 naira per dollar in the I&E window.
Currency dealers and Bureau De Change (BDC) operators across various locations confirmed the naira’s slide. At the Lagos airport, a BDC operator named Sanusi Ibrahim reported trading the naira at 890 naira per dollar for buying and 900 naira per dollar for selling.
Meanwhile, a BDC operator in Abuja’s Central Business District, Yusuf Kareem, noted that the scarcity of dollars persisted and the rate had reached 900 naira per dollar.
In Ikeja, Lagos, a currency dealer named Alhaji Gambo Aliu stated that he sold the greenback at 905 naira per dollar.
As the naira’s value continued to weaken, the Central Bank of Nigeria (CBN) issued a warning that it would revoke the licenses of BDCs that violated its regulations. The President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, confirmed that the CBN reiterated this stance during a sensitization session with BDC operators.
The central bank threatened to revoke the licenses of operators who breached the stipulated margin limits and failed to adhere to reporting and penalty payment requirements.
Recently, the CBN directed BDCs to trade foreign currencies at rates comparable to those on the I&E forex window, with allowable spread limits of -2.5% to +2.5% of the previous day’s Nigerian exchange market window weighted average rate.
The directive also outlined the need for mandatory reporting by BDC operators to meet financial institution forex rendition system requirements. This directive was conveyed to BDCs in a circular dated August 17, 2023, titled ‘Operational Mechanism for Bureau de Change Operations in Nigeria.’
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