These are definitely not interesting times for the
nation’s economy, particularly the national
currency, the naira, no thanks to the depleting
reserves and the subsequent banning of
importers of 41 items from the foreign exchange
market by the Central Bank of Nigeria.
Barely 10 days after the CBN stopped forex sale
to importers of rice, textile and 39 other items,
the naira on Wednesday crashed to 230 against
the United States dollar at the parallel market,
down from 218 recorded on June 23 when the
new forex rule was introduced.
The policy, which has pushed huge forex demand
from the interbank (official) market to the
parallel (black) market and the Bureau de
Change retail segment, has led to artificial
scarcity of dollar and other major foreign
currencies as operators now hoard them in
anticipation of higher prices.
The naira had fallen to 220, 223, 226.5 and 228
against the dollar in the past one week.
Black market and BDC operators, however, told
our correspondent that serious dollar liquidity
squeeze was already hitting the market and
operators were no longer in possession of huge
stock of forex to meet rising demands, especially
from the importers of the banned items.
Using the CBN figures, analysts had estimated
that about $5.7bn quarterly forex demand was
being transferred from the official interbank
market to the black market.
“The situation is getting critical now. There is
serious dollar liquidity squeeze in the market
now. The demand is overwhelming and both the
black market and the BDC segment can no
longer meet the demand,” a black market
operator told our correspondent on Wednesday.
“The market is very volatile now as a result of
the restrictions placed on about 41 items by the
central bank. Most importers are now
patronising the parallel market to source their
dollars,” the head of a BDC, Mr. Harrison Owoh,
told Reuters on Wednesday,.Meanwhile, the
Association of Bureau De Change Operators has
written to the CBN asking it to intervene in the
dollar scarcity in the parallel market and the BDC
segment to save the naira from crashing further.