Naira sinks further at N400 to dollar

The currency volatility in the unofficial market yesterday pushed the naira to dollar exchange rate to N400. Head Treasury at Ecobank Nigeria, Olakunle Ezun, who spoke to the correspondent, confirmed the naira rate to dollar. He said the local currency is facing a volcanic volatility against the greenback and the trend may likely persist.

The naira had yesterday exchanged at N372 to dollar on Wednesday, an indication that it is losing an average of N20 per day as importers scramble for the greenback.

President, Association of Bureau De Change of Nigeria (ABCON) Aminu Gwadabe said the importers are busy mopping up any dollar they can find because they are unsure of what will happen the next day.

He said the Central Bank of Nigeria (CBN’s) decision not to sell dollar to the bureaux de change (BDC) operators has created the ongoing panic in the market. He said the CBN is even rationing dollar for manufacturers and others that legitimately need the greenback to fund their operations.

Gwadabe said his group is discouraging BDCs from buying or selling at the current rate because it does not add value to the economy.

“We have supported the government and will keep doing so. So, we have advised members of ABCON not to buy at current rates,” he said.

“In my own view, the central bank should address the supply side of the market by allowing oil companies and banks to sell dollar to bureau de change operators as an immediate measure to reduce pressure on the naira,” Gwadabe.

CBN Director of Communications, Ibrahim Mu’azu said the rate is speculative “Ask the BDCs the volume of dollar they have sold at this rate and you find out the truth. These rates are not realistic rates,” he said. He said the CBN has been meeting all legitimate demands for foreign exchange and will keep doing so in the interest of the economy. “It does not look like a price that is backed by demand,” he said.

Tumbling global oil prices have battered Nigeria’s crude exporter, with foreign exchange reserves down to an 11-year low at $27.85 billion by February 11. Government is concerned that further depreciation will hurt poor Nigerians, but the bank’s refusal to revise the pegged exchange rate has widened a chasm between official rates and the parallel market.

- THE NATION