Naira at 490/$1 as year nears end

The Naira exchanged for 490 per dollar on Lagos streets yesterday, as the foreign exchange market opened to trade for the remaining days of the year.

The currency, however,  depreciated from the 485 per dollar it traded on Tuesday at the parallel market.

At the official interbank market, it traded at 305.25 per dollar, while the euro and the British pound exchanged for N330 and N388, respectively.

Analysts envisage further depreciation of the naira to 500 against the greenback before the end of the year.

Traders said the currency had been trading at 485 per dollar at the parallel market a day before the market opened operation officially.

The naira had been selling for 495/dollar since Friday and all through the weekend, but firmed against the greenback at the black market on Tuesday.

“There is an acute shortage of dollars in the market because of supply being slashed by half to Bureau de Change (BDC) operators from international money transfer agents, pushing the naira down,” one trader said.

The BDC operators are now getting $8,000 each per week from Travelex against the usual $15,000 hitherto.

The naira had tumbled against the dollar to 490 on Tuesday from 485 it sold on Monday, as traders linked the drop to acute shortage of the greenback.

A week ago, precisely last Monday and Tuesday, the Nigerian currency traded flat at 490 after closing at 487/dollar the previous Friday.

The naira has been under unrelenting severe pressure as the scarcity of the US currency continues to create ripples in the financial market and the economy.

“The challenge at the forex market is still the supply issue; price (exchange rate) is determined by the interplay of demand and supply,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said.

A few weeks ago, the naira closed flat at 470/dollar against the greenback for some days.

The naira plunged to 470/dollar, down from 455/dollar on the back of a fresh dollar shortage at the official and parallel forex markets.

The naira has, however, consistently closed around 305.5 a dollar level since August via the official window.

The local currency has been under persistent pressure both at the official and parallel foreign exchange markets owing to the acute shortage of the United States currency.

Currency dealers said the consistent clampdown on black market operators by security agents had driven some currency retailers underground, putting more pressure on available dollars.