Before falling to 487 on Friday, the local currency had consecutively closed flat at 485 for four days last week.
The severe shortage of the dollar has put the naira under persistent pressure at both the official and parallel forex markets.
The global crash in the prices of crude oil, Nigeria’s main forex earner, has brought untold hardships to Nigerians.
Economic
and financial experts said unless the lingering dollar supply problem
was abated, the volatility in the exchange rate and the consequent
economic challenges might be endless.
“The
challenge with the forex market is still the supply issue; price
(exchange rate) is determined by the interplay of demand and supply,” a
currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had said.
According
to the Managing Director, Cowry Asset Management Limited, Mr. Johnson
Chukwu, the Federal Government needs to access an emergency lifeline of
about $10bn from the International Monetary Fund to stabilise the
exchange rate and restore investor confidence to the financial markets.
Economic and financial experts expect the naira to weaken further against the dollar as the Christmas holiday begins this week.
They
also argued that the crackdown on the parallel market forex traders and
the persistent scarcity of the greenback would make further weakening
of the local currency inevitable.
The naira had, however, consistently closed around 305.5 a dollar at the official window since August.
A few weeks ago, the naira closed flat at 470 against the greenback over a period of over a week.
The naira had plunged to 470, down from 455 on the back of a fresh dollar shortage at the official and parallel forex markets.
Travelex
and First Bank of Nigeria Limited commenced the sale of forex to Bureau
De Change operators about two months ago after getting the Central Bank
of Nigeria’s approval.
Some forex traders, however, said the scheme had failed to ease the biting dollar shortage in the country.
“What we get from Travelex is not sufficient,” one trader said, referring to the demand in the market.
The
President, Association of Bureau De Change Operators, Alhaji Aminu
Gwadabe, said the sale of dollars to the BDC operators had yet to cut
across the country.
This, he said, was partly responsible for the grueling dollar scarcity.
“There
are still logistics problems in selling forex to all the BDC operators;
this is what is causing this relative scarcity,” he said.
The
CBN had asked the International Money Transfer Operators to sell
dollars directly to the BDC operators to boost liquidity and narrow the
gulf between the parallel and official market rates.
Dollar
shortages have caused many companies to halt operations and lay off
workers, compounding an economic crisis exacerbated by the fall in
global prices of oil, which accounts for over 70 per cent of Nigeria’s
budget revenue.
The CBN has struggled to support the naira as the country’s external reserves continue to fall.
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