The naira yesterday dropped by 3.2 per cent to N782.38 per dollar at the market-driven Investors and Exporters (I & E) window.
It was said to have traded at N900 per dollar in the parallel market.
The volatility is attributed to the rising backlog of unmet dollar demand and scarcity of the greenback at the official and retail ends of the market.
With an estimated $8 billion backlog of demand at the official market, and dollar scarcity at the parallel market, local currency has continued to depreciate significantly.
With a $45 million turnover, the supply at the official market has equally nosedived, with a large part of the demand spiralling into the parallel market.
Forex dealers said there was a serious scarcity of the dollar, which requires urgent intervention from the Central Bank of Nigeria (CBN) for the rates to retreat.
President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said the naira is rapidly depreciating and has become one of the most unpredictable currencies in recent days.
He kicked against the widening gap between the I&E window rate and the parallel market rate, which he said, has continued to incentivise illegal economic behaviour like speculation, forex holding, arbitrages and frivolous demands.
He said volatility in the parallel market is most pervasive and hurting the economy.
“In order to immediately address the lingering naira crisis, the CBN should consider revisiting the suspension of BDCs operations into the harmonised I&E window.
“The BDCs remain the potent transmission mechanism of exchange rate stability in the market by enhancing liquidity.
“In the same vein, the Nigeria National Petroleum Company should henceforth suspend any deductions from the sale of crude oil to CBN to help boost reserves and build confidence in supply,” he said.
Gwadabe said as uncertainties by the foreign investors continue to hold their investment decisions, the CBN should demonopolise the players in the diaspora remittances and allow BDCs to access their proceeds.
Also, the IOCs should be allowed to sell their monies in an open and transparent manner to inject liquidity, he said.
A BDC operator based in Booskshop House, Central Lagos, Musa Babaiye, said the market is tense with demand.
He said many retail end users who looked up to banks to meet their demands are returning to the parallel market to make purchases
He said the role of BDCs in the forex market remains to meet the forex needs in the retail segment.
According to him, the rising demands are coming from importers, travellers and speculators, which continue to pile pressure on the market.