dollar from 191 to 208 at the parallel market,
otherwise known as the black market.
The dollar sold for between N205 and N208 on the
streets of Lagos, Abuja and other major cities in the
country.
The currency had exchange for between N188 and
N191 on the streets of Lagos and other key cities on
Wednesday and Thursday morning, dealers said.
The latest fall in the naira's value came less than two
months after the Central Bank of Nigeria was forced to
devalue the local currency by eight per cent from 155
to 168 against the dollar following the continued
decline in the prices of crude oil in the international
market.
The fall in oil revenue, from which the nation derives
95 per cent of its foreign exchange, has led to a drastic
reduction in the external reserves from which the CBN
supports the naira.
The reserves had fallen by over 20 per cent from
$43bn a year ago to $34.4bn as of January 22, 2015.
Although the CBN still sells the dollar to approved
buyers for N168 at its twice-weekly regulated auctions
called the Retail Dutch Auction System, the naira
closed against the United States currency at 190.08 at
the interbank segment of the foreign exchange market
on Friday.
Analysts said the latest fall in the value of the naira at
the parallel market was due to recent policy measures
by the CBN, which were aimed at stopping
speculations on the currency.
The CBN had on Wednesday stopped banks and other
dealers from selling dollars to Bureaux de Change
operators. It also said dollars bought at the RDAS and
interbank segment of the foreign exchange market
should be used strictly for the funding of letters of
credit, bills for collections and invisible transactions.
However, the central bank on Friday evening increased
its weekly dollar sale to the BDCs from $15,000 to
$30,000 and said the move was meant to reposition
the forex market.
Some analysts said the CBN's action might calm the
market and make the naira to appreciate. Others,
however, said the naira might depreciate further next
week.
The News Agency of Nigeria reported on Friday that
the naira depreciated against the dollar as it traded at
N208 from the N191.50 it sold for on Monday,
January 19, thus losing N16.50 within five days.
The CBN's website, however, put the naira against the
dollar at N167.50, while the pound sold for N253.20
and the euro stood at N193.89.
NAN quoted that some Bureau de Change and black
market operators in Lagos as saying that they could
not give rates to the pound sterling and the euro.
The dealers also said that there was a scarcity of
dollars in circulation, because the CBN reduced the
sale of dollars to the BDCs since last year.
The dealers added that the recent review of the forex
trading positions of banks to 72 hours was also
contributing to speculations in the system.
The effect, they added, was that the naira could
depreciate further by next week.
Industry analysts recently predicted that the naira
would likely exchange against the dollar for over 220
soon.
According to experts, the naira has remained under
continued pressure owing to the continued fall in the
prices of crude oil in the international market and
increased demand for the dollar locally.
The development, they said, would lead to a number
of economic challenges this year.
"After the elections, the naira will sell above 220
against the dollar at the parallel market. And it is also
noteworthy to say that the CBN will devalue the naira
again after the February elections. The reason is due to
the falling oil prices and the current demand pressure
we are witnessing on the dollar," the Acting President,
Association of Bureau de Change Operators, Mr.
Aminu Gwadabe, told our correspondent in an
interview on Monday.
Some Nigerian and foreign analysts have also
predicted that the naira will sell for between 195 and
205 at the official market this year.
They equally believe that the CBN will devalue the
naira again after the elections.
BGL Plc, a Nigeria-based research and investment
advisory firm, quoted analysts in its recent 2015
outlook report as saying that the naira would sell
around 205 to the dollar at the official market.
Goldman Sachs had on July 18, 2014 forecast that the
naira would trade at 195 to the dollar in 12 months.
The Managing Director, Financial Derivatives Company
Limited, Mr. Bismarck Rewane, said the parallel market
rate was expected to cross N200 as the dollar demand
pressure persists.
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