Nigerian Naira again fell by 1.09 per cent rising to N460 in the parallel market on Monday. This may be connected to President Muhammadu Buhari‘s directive Stopping the Central Bank of Nigeria (CBN) from dollar sales for food and fertiliser imports.
But the official market sales of dollar to naira by the CBN, the naira still trades at N381 to the dollar, while it was quoted at N385.83 naira on the spot market yesterday.
Buhari last Thursday directed the CBN to stop selling foreign exchange for those imports the country has in abundance, this is similar to an order the president issued last year.
The NATION reports that, Nigeria faces its worst economic crisis in four decades triggered by an oil price crash induced by the novel coronavirus pandemic. The crisis has slashed government revenue, weakened the currency and created large financing gap for the economy.
A trader attributed the high dollar demand in the parallel market to importers who have to make payments to bring in goods for end-of-year sales.
The naira had firmed sharply two weeks ago on the parallel market after the CBN resumed dollar sales to individuals and investors to clear their demand.
But sales have not being enough, traders say, with pressure piling up on the currency. Nigeria has spent 16.6 per cent of its dollar reserve from last year to $35.77 billion.
Dollar liquidity dried up on the spot market after foreign investors dumped Nigerian assets following the oil price crash. However, CBN’s forex sales has also been inadequate.