There appears to be no let-off for Nigerian currency, Naira, as the mounting pressure on it remains unabated.
The Nigerian currency had depreciated to N415 per dollar at the parallel market as at 2pm on Tuesday, March 31, according to the rates seen on Aboki Fx.
According to the source, Naira also depreciated to almost N400 per dollar at the Investors and Exporters (I&E) forex window.
The continuous slide in the value of Naira is not unexpected, as the decline in crude oil prices (Nigeria’s main foreign exchange earner) globally still continues.
[READ MORE: Nigerian banks broadly positive after Naira devaluation)
This development is in addition to the lockdown and restrictions, which have become a global trend, in order to curtail the spread of the coronavirus pandemic.
With the current rate of N415, the local currency has depreciated by N5 from the N410 per dollar, which it traded on Friday evening.
Recall that last week, the Central Bank of Nigeria (CBN) suspended the sale of foreign exchange to the Bureau De Change (BDC) operators. The suspension was at the instance of the BDC operators, who had written to CBN, and requested for that until the containment of the coronavirus disease and the reopening of the airports and the land borders.
Since the suspension of sales of foreign exchange by the CBN, Naira has been on a steady decline at the parallel market
The steady depreciation of Naira is happening despite a decline in demand for foreign exchange due to the impact of the coronavirus pandemic on the economy, travel restrictions and the restrictions on businesses and households.
[READ ALSO: Naira drops further against US dollar at $1/N400)
The deposit money banks are not left out of the impact of scarcity of foreign exchange in the market, as even foreign remittances are expected to drop due to lockdowns and restrictions globally. As a reaction to the development, some of the lenders, as was reported by Nairametics, have started reducing the international spending limits of their customers on their naira denominated debit card.
The uncertainty in the Foreign exchange market has led to a lot of speculation, as a lot of individuals and businesses have been involved in panic buying of the dollar.
