Dollar Overtakes Euro, Exchanges For N1,155 As Forex Crisis Worsens

The United States dollar has overtaken the Euro in the Bureau de Change segment of the foreign exchange market, trading at N1,155 per dollar as demand pressure mounts.

Data gathered from operators across Abuja and Lagos showed that the Euro was sold lower than the USD at N1,140/€. The British pound also gained against the naira to trade at N1,330/£.

The BDCs bought the dollars N1,145/$, the Euro at N1,130/€ and N1320/£, THE WHISTLER found.

The development is coming amid efforts by BDC operators to curb the rate of speculation in the BDC segment of the Nigerian Foreign Exchange Market.

At the official market, the naira is trading as high as N986 per dollar, according to data from FMDQ. On Wednesday, the CBN Weighted Average closed at N883.5/$.

The CBN governor, Yemi Cardoso, had on October 12, 2023 lifted the forex ban on the 43 items placed by the former governor, Godwin Emefiele in 2015.

However, the new CBN administration said the ban on the 43 items was responsible for depreciation of the naira in the parallel market.

The CBN explained, “The restrictions pushed importers into the parallel market, contributing to the
surplus demand for FOREX. This weakened the parallel-market exchange rate, pushing up prices.

“The CBN wants a unified market for FOREX with flexible and transparent pricing. The CBN wants to ensure price stability and is seeking to boost liquidity in the Nigerian Foreign Exchange Market. As liquidity improves, we expect the distortions to moderate.”

Speaking to THE WHISTLER, the Chief Executive Officer of GR Umar International Ltd, Salisu Umar Garu, said the CBN does not have the capacity to meet the forex demand for the importers of 43 items.

“This is a market. For instance, they (CBN) lifted the forex ban on 43 items and they are willing to give dollars to them to enable their import activities. The CBN may not be able to meet the demands of all of the importers of the 43 items when this happens, the rest will return to the parallel market and the system will be overwhelmed again,” Garu said.