The Naira has fallen further to the dollar on the black market.
The local currency was trading around 495 to the dollar on the black market on Thursday, compared to 485 per dollar last week due to dollar shortages.
Traders say the Naira could hit the 500 mark by next week as greenback scarcity persists and the central bank cuts supply to forex operators.
The naira was quoted at 310.5 to the dollar on the official interbank window.
Bureau de change operators are now getting $8,000 each per week from Travelex against the usual $15,000 each per week.
“There is an acute shortage of dollars in the market because of supply being slashed by half to bureau de change from international money transfer agents, pushing the naira down,” one trader said.
On Tuesday, Nigeria’s Minister of finance said the county’s central bank would eliminate the hard currency black market in the country.
Currently, the naira trades about 40 percent weaker against the dollar than the official rate at the black market.
Kemi Adeosun told a conference “The central bank (CBN) has been directed to do this and CBN has promised to do something by putting a system in place to eliminate the black market because it’s damaging the economy”.
The severe shortage of the dollar has put the naira under persistent pressure at both the official and parallel forex markets.
Earlier forecasts had predicted that the Naira would stay broadly stable at the currency market.
This was predicated on the waning demand of the dollar currency.
At the moment, the tempo of businesses in the country have slowed down ahead of the Christmas festivities.
Nigerians living abroad who will be visiting home for the holidays are also expected to bring in hard currency inflows and offer extra support to the naira.
The Naira has been on a free fall in the past few weeks.
Nigeria’s interbank market sets the naira’s official value and is meant to serve businesses. But the scarcity of foreign-currency has forced many to go to licensed bureaux de change and the unofficial, or black, market of informal street traders, both of which sell dollars at a higher rate.
The central bank has made several attempts to defend the naira after it plunged in late 2014 along with crude prices.
Economic and financial experts said unless the lingering dollar supply problem was abated, the volatility in the exchange rate and the consequent economic challenges might be endless.
Source: TV360 NG