The Nigerian Naira weakened further to N1,410/$ in the unofficial market on Friday afternoon as traders saw an aggravated demand for the dollar by parents and travelers.
This marks a 2.84% decrease from Thursday’s rate of N1,380.
Reports from Bureau De Change (BDC) operators indicate that the Naira initially traded at N1,370 to the dollar earlier in the day before rising to N1,410, showcasing the currency’s volatility.
One trader at Airport Road in Lagos confirmed that two of his “clients” purchased dollars with which to pay foreign school fees. Another trader at Zone 4 in Abuja said he sold dollars to a woman planning to travel abroad.
Since the start of May, the Naira has seen a steady decline, a stark contrast to the N1,060 rate on April 18th, 2024.
In the NAFEM market, Nairametrics had reported earlier on Friday that the Naira saw a slight decline, settling at N1,402.67 to the dollar, representing a 0.83% decrease from N1,390.96 in April.
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The suspension of BDC operations in July 2021 led to increased market volatility. According to Nairalytics, Nairametrics’ research division, the Naira was trading around N500 to the dollar before the suspension but has since depreciated further.
The Central Bank of Nigeria (CBN) has issued various directives to stabilize the currency, utilizing BDCs to satisfy the continuous demand from currency traders for various needs such as school and medical fees, as well as personal and business travel allowances. Furthermore, the CBN aims to align the rates of the parallel market with those of the Nigerian Autonomous Foreign Exchange Market (NAFEM), but that has not always happened.
The central bank has issued a revised set of regulations for BDC operators, granting them the authority to act as agents for international money transfer service providers and International Money Transfer Operators (IMTOs). This move is aimed at boosting the inflow of remittances from the diaspora.
Significantly, the latest policies and directives from the CBN have been instrumental in curbing unlawful financial activities and establishing a foundation for broadening the avenues of foreign exchange earnings.
This is a developing story…
