A surge in demand for dollars in the parallel market driven by banks and end-users combined with slow forex disbursement to BDCs by the Central Bank of Nigeria, CBN, caused the Naira, last week, to fall by 23 per cent against the dollar, thus recording the worst weekly performance of the Naira since February.
came to the rescue of the Naira on Friday by intervening in the official Nigeria Foreign Exchange Market, NAFEM, hence appreciation of the Naira in the parallel market on Friday, currency dealers and analysts were uncertain about the fortunes of the Naira this week, citing pace and speed of CBN intervention as a determining factor.
To exploit this gap, banks besieged the parallel market, buy dollars at the cheaper rate and resell to their customers at the higher official exchange rate. Confirming this to Vanguard, President, Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, said:"The depreciation of the dollar was caused by two factors. The first was that people were buying from the open market, deposit the dollars in their domiciliary accounts and sell in the interbank market and this is because the open market rate is always lower than the interbank market rate.
"Also forex demand that waited for Naira to strengthen seems to be filtering through now, both local and FPI's." Similarly, Isa Yahaya, a currency dealer in Ikeja said:"In Ikeja today, we bought at N1,320 and sold at N1,350. But the market opened today at N1, 450 per dollar of which I bought a dollar for N1,550.
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