The US dollar, the much sought after currency in Nigeria slumped by 5.38% on Tuesday at Nigeria’s parallel market, its second successive fall since Friday.
At the market today, a dollar sold for N440. The rate was N465 on Monday, meaning the Naira gained N25. The buying rate is even much lower at N430.
“When we look at the rates monthly, US Dollar was traded at ₦473.00 at the beginning of August on Monday, August 03, 2020. As of today with Dollar being traded at ₦440.00, we see a %6.98 fall for USD to Naira exchange rates since the beginning of last August”, reported ngnrates.com
However, there is still a gulf between the market rate and the official rate. As at Monday, the CBN rate for a dollar was N379.
While the dollar fell heaviest in the parallel market, the Euro only depreciated 0.55% to exchange for N542.
However the British pound also fell by 2.48% , to exchange for N590.
The official exchange rate for Euro is N452 and the pounds N505.
Currency watchers said the American dollar may fall further as the Central Bank of Nigeria tightens some rules.
This has fuelled some panic selling by traders and speculators.
According to Nairametrics, “speculators are scrambling to sell their forex pile as forex traders are reportedly turning down offers to buy due to fear that the naira could strengthen again.
It reported that panic selling was on the mind of most forex traders who fear measures imposed by the CBN might leave them in losses
One of these measures is the banning of third parties from buying foreign exchange which is routed through Form M.
The CBN has also threatened to clamp down on exporters who fail to repatriate their forex earnings.
`It directed banks to submit the names, addresses, and Bank Verification Number (BVN) of all the exporters who have failed to repatriate their export proceeds for necessary sanctions.
The measures are meant to boost liquidity in the foreign exchange market and conserve forex simultaneously.