There are indications that exchange rate crises that trailed the foreign exchange market reforms in June 2023 may linger further as the supply gap led to further depreciation of the Naira in the parallel market yesterday to N930/ $1, down from N925 mid-last week.
However, the exchange rate improved week-on-week in the Investors and Exporters (I&E) window to N758.1 from N775.6.
The prevailing exchange rates indicate a rising parallel market premium which is the gap between the parallel market rate and that of the I&E window.
The gap, as of last week Wednesday, was N153.41 per dollar but has risen to N171.9 per dollar by yesterday, a development which has created a huge incentive for round-tripping and arbitraging in the foreign exchange market ecosystem.
Moreover, market observers have also noted that the Bureau de Changes, BDCs, have not helped the market as envisaged a month ago when the segment was re-admitted into the Central Bank Of Nigeria, CBN, the official trading window for the purpose of opening the market to more independent forex supply and better access for individual retail end users.
The BDCs have, instead, lamented that the renewed depreciation of the local currency was mainly due to the scarcity of foreign currencies.
A BDC operator told Vanguard that the scarcity is so much that ‘‘even some Nigerians are unable to withdraw forex from their domiciliary accounts in banks”.
He said the lifting of the ban by the CBN on sales of forex to BDC operators has failed to help resolve the scarcity as the banks are not selling to the BDCs.
Data from FMDQ showed that the market opened at N761.24 to the dollar, recording a high of N807.15 and a low of N738.
A total of $42.26 million was traded in foreign exchange at the I&E window.
