Posted on: 09:04 Thu, 18 Feb 2016



The Nigerian Naira is on a free fall in the parallel market, while official interbank rates remain stable.

According to Vanguard, the demand for dollars to
pay for Chinese goods is part of the reason for
the latest decline.

According to a BDC operator who spoke on
condition of anonymity, “You know China had
been on its one month annual holidays.

But they resumed work on Monday, and people
have to complete payment for goods ordered
before the holidays.

They had made 30% down payment to order
the goods and they now have to pay the 70%
balance otherwise they will lose the 30%.

That is why they are desperate and ready to
buy dollars at any rate. Meanwhile supply is
scarce and those who have dollars are not
willing to sell because they might also need
the currency soon”.

The newspaper traces the beginning of the rapid
fall of the Nigerian Naira to when the Central
Bank of Nigeria stopped the weekly sale to
Bureau de Changes with dollars on January 12th,
2016.

The USD rate was 265 Naira then. Now it’s ₦385,
60 Naira down from ₦325 last week, and ₦505 to
the British Pound, 65 Naira down from ₦440 last
week.

The interbank rates remain the same at ₦199.34
for Dollars.

With school fees and medical bills suspended
from the list of official forex last week, the
demand on the dollars and pounds in the parallel
market is undoubtedly set to increase.

Source: Vanguard