Naira crashes to N710/$1

Forex scarcity pushes exchange rate to N782/$

Despite starting the day at N675/$1, the naira exchange rate with the US dollar on Wednesday, fell beyond the N710/$1 threshold at the black market.

The Nigerian currency  has been under immense pressure in the past two weeks, falling from an average of N618 to a dollar recorded two weeks ago. Daily Sun had earlier reported there were strong indications that the dollar might hit N700/$1 before the week runs out.

In the same vein, some bank customers with FX in their domiciliary account revealed they have not been able to withdraw their funds from the bank due to tightened liquidity.

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The Central Bank of Nigeria (CBN) had a year ago banned the sale of FX to BDCs, citing the illegal transactions as the reason for its decision. At that time, the exchange rate was about N501/$1 with $33 billion in the country’s FX reserves.

Prior to the ban, BDC operators were a major black market, providing exchange rate support to those who could not formally access foreign currencies directly from the CBN.

Further more, just last week, in an attempt to further restrict the flow of forex at the parallel market, the apex bank threatened to arrest and prosecute Nigerians using naira to buy dollars.

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The CBN Governor, Godwin Emefiele, during last week’s  Monetary Policy Committee (MPC) meeting in Lagos, said, “For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that”.

But reacting to the current development, BDCs in Lagos as well as other economic experts, criticised the CBN for failing to initiate policies that would help stabilise the country’s currency value in the forex market.

A BDC operator on Lagos Island who craved for anonymity, while speaking to Daily Sun yesterday, said, “At this rate, I just think the dollar might get to N1000 because the CBN which did all it could in the name of illegality has not been able to come up with a solution to supply FX”

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Another operator said, “The CBN ought to answer Nigerians on how it has failed to stabilise our own Naira. If they thought that they had saved Nigerians from us (BDCs), they have just started multiplying the suffering of the masses especially those who travel”.


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