Naira falls to 475 per dollar

 Naira falls to 475 per dollar

By Modupe Shodeinde

The naira has further weakened against the dollar at 475 per US dollar in the parallel market on Monday.

On Friday, the naira had fallen to 470 per dollar from 468 on Thursday.The naira was trading at 462-463 at the unofficial market at the start of this month.

The naira depreciated against the dollar, closing at N470/$1 at the parallel market on Friday as the inability of the official market to meet increasing forex demand of manufacturers and traders put further pressure on the parallel market

The naira closed at 386 to a dollar In the Investors’ and Exporters’ forex window on Monday compared to 385.50 at which it opened.

The official exchange rate has been kept at N379/$1 since August. This was when the CBN devalued the naira for the second time this year from 360 per dollar. It was first devalued to 360 in March from 306.

The local currency had strengthened by about 7.8% within one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers.

This measures were to boost the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.

The CBN resumed sale to licensed Bureau de Change operators in September after the Federal Government opened up international travel following the lifting of COVID-19 restrictions.

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This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.

However, the exchange rate against the dollar has remained volatile after the initial gains made.

The President of the Association of Bureau De Change Operators, Aminu Gwadebe, said he expects the impact of the extra liquidity in the market to be gradual.

Nairametrics reported that despite the drop in speculative buying of foreign exchange, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.

lagosstreetjournal

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