Outrage as Naira Crosses 700 to the Dollar

There is outrage among Nigerian users of the dollar as the Naira has crossed 700 against the foreign currency.

The crash was more noticeable in the parallel market where most users visit for their daily foreign transactions considering that it is almost never accessible in the banks.

The exchange rate at the parallel market depreciated significantly to a record low of N667/$1 in the early hours of Tuesday, representing a 1.72% decline compared to N655.73/$1 recorded on Monday morning.

The depreciation is the highest rate recorded in the unofficial market amid further scarcity of forex in the market.

While buyers were still coming to terms with the depreciation, the nation’s currency plummeted further on Wednesday to N710 against the U.S. dollar on the exchange platform Aboki Forex.

Peoples Gazette reports that Wednesday’s parallel market rate pegged at N710 to a dollar.

The latest development comes a year after the Central Bank of Nigeria (CBN) prohibited the sale of foreign currency to bureau de change operators.

The apex bank previously banned the sale of foreign exchange to BDC operators due to their unauthorized sales of foreign exchange above the market they were authorized to serve.

Prior to the ban, BDC operators were a major black market, providing exchange rate support to those who could not readily access foreign currencies directly from the CBN.

The suspension of BDC operators’ ability to source foreign exchange from the CBN is seen as a threat to the country’s economy as it could mount further pressure on the national currency.

At the time the CBN Governor Godwin Emefiele banned the sale of forex to BDC, the exchange rate was around N501 to a dollar. However, a year after the ban, the value of the naira plummeted to N670 to a dollar.

In an attempt to further restrict the flow of forex at the parallel market, the CBN threatened to arrest and prosecute Nigerians using naira to buy dollars last week.

“For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that,” Emefiele said at a Monetary Policy Committee (MPC) meeting in Lagos months ago.

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Outrage as Naira Inches Crosses 700 to the Dollar