The exchange rate between the naira and dollar plummeted to as low as N910/$1 on the parallel market.
Operators who spoke to Nairametrics quoted rates as high as N910/$1 on Wednesday as they continue to cite higher demand as the main reason.
The naira has now weakened by 4.39% in the first 9 days of August on the parallel market. The exchange rate weakened by 11.5% in the whole of July 2023.
Nairametrics reported on Tuesday that the exchange rate had crossed N900/$1 for the first time, an all-time low. However, higher demands have continued to pile pressure on the exchange rate as bidders are made to bid higher.
Quotes for the British Pounds and Euro also rose to as high as N1,171 and N972 to the dollar all gaining against the dollar.
BDC operators kick: In an interview on Wednesday, the Chairman of the Bureau De Change Operators, Alhaji Aminu Gwadebe, called for a ban on the cryptocurrency platform Binance, citing its growing influence as the anchor for determining the exchange rate.
- “If you know about Binance, you will know that Binance trading is becoming the anchorage of both the investors and exporters window and the parallel market, which is unfortunate.
- So, we have to do something that can stop Binance. It’s a competition; we need to ban Binance and the only way to do so is if you have liquidity.
- As I speak, Binance is the most liquid market; they do 1.2 million transactions per second. So it’s a very liquid market but that is not a scary status, we can break it through our local content and peculiarities.” Alhaji Aminu Gwadebe
A quick check on the cryptocurrency platform, Binance, however, shows the exchange rate is quoted for as high as N916/$1.
Disparity widens: The disparity between the official and parallel market rates continues to widen after the I&E window closed at N757.51/$1 on Tuesday, August 8th.
- The disparity is now N153/$1 one of the widest since the unification of the naira on June 14th, 2023.
- In contrast, the exchange rate unification was expected to bridge the gap between the official and black market rates.
- Analyst point to pent-up demand as the major reason why most forex buyers continue to patronize the black market.
They suggest most importers still struggle to fill their needs on the official market especially with I&E window turnover averaging $80 million daily.
The black market can be neutralised with a few straightforward steps.
– Lift all restrictions on the I&E window, including the tax clearance cert and 42 banned items.
– Reform your ports and agressively facilitate non-oil exports.
– Fix your mess of a budget. Enshrine fiscal discipline across all government levels.
– Build and/or license more modular refineries. Stop branding them as illegal and destroying them.
Perfectly on point.
Thank you