Naira weakens further to N1,410/$1 in parallel trades amid aggravated demand

The Nigerian naira weakened further to N1,410/$ in the unofficial market on Friday afternoon as traders saw aggravated demand for dollars from parents and travellers.

This marks a decrease of 2.84% from Thursday’s rate of N1,380.

Reports from Bureau de Change (BDC) traders indicate that the Naira was initially quoted at N1,370 per dollar earlier in the day before rising to N1,410, demonstrating the volatility of the currency.

A trader on Airport Road in Lagos confirmed that two of his “customers” bought dollars to pay school fees abroad. Another trader in Zone 4 in Abuja said he sold dollars to a woman who was planning to travel abroad.

Since the beginning of May, the naira has seen a steady decline, in stark contrast to the exchange rate of 1,060 naira on April 18, 2024.

In the NAFEM market, Nairametrics had earlier reported on Friday that the naira saw a slight decline, settling at N1,402.67 per dollar, representing a decline of 0.83% from N1,390.96 in April.

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The suspension of BDC operations in July 2021 caused increased volatility in the market. According to Nairalytics, the research arm of Nairametrics, the naira was trading around N500 to the dollar before the suspension but has since depreciated further.

The Central Bank of Nigeria (CBN) has issued several directives to stabilize the currency, using BDC to meet the continued demand of foreign exchange traders for various needs such as school and medical expenses, as well as allowances for personal and business travel. Additionally, the CBN aims to align parallel market rates with those of the Nigerian Autonomous Foreign Exchange Market (NAFEM), but that has not always happened.

The central bank has issued a revised set of regulations for BDC operators, granting them the authority to act as agents of international money transfer service providers and International Money Transfer Operators (IMTO). This measure aims to boost the inflow of remittances from the diaspora.

Significantly, the latest policies and directives of the CBN have been instrumental in curbing illegal financial activities and establishing a basis for expanding foreign exchange earning avenues.

This is a developing story…