Increased demand for dollars from Muslim pilgrims travelling and individuals paying for school fees abroad has led to a fall in the Naira on Wednesday at the black market.
The Naira was quoted at N370 to the dollar on the black market on Wednesday as against N368 in its previous session, traders said.The currency has traded within a range of N359 to N366 to the dollar for investors and on the parallel market over the past two weeks. CBN rates are currently at N305 to the dollar.
In February, the Central Bank Nigeria (CBN) released more than $4 billion to the inter-bank and Bureau de Change foreign exchange market in its bid to sustain forex supply to different categories of users. This translated to the appreciation of the Naira from an all-time low of about N560 to a dollar, to N360 within two months.
The CBN had announced on Wednesday that it would sell dollars to clear a backlog of demand from airlines and to importers of petroleum products and raw materials.
However, traders reported that demand has resurfaced in the past one week as private individuals with certain expenses in hard currency source for dollars.
Also, Nigeria Senate in July recommended that Muslim pilgrims travelling to Saudi Arabia this year should be able to buy their dollars for N200, far below the official rate.
Aminu Gwadabe, president of the Bureau de Change (BDC) operators told Reuters that pressure was coming from pilgrims travelling for haj and that the CBN had not granted any concessions. He also stated that the low dollar liquuidity was due to the refusal of some of his members to participate in a CBN auction due to the tight margins.