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Nigeria’s naira falls to N527 to the dollar, its lowest level on parallel market

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Nigerian naira currency fell on Monday to a new record low of N527 against the dollar on the parallel market compared with N524 it closed on Friday, traders said.

The naira has continue to deprciate against the greenback on the parallel market since the Central Bank of Nigeria (CBN) suspended dollar sales to the Bureau de Change (BDC) operatiors last month.

Though the naira has been osciliating between N410 to the dollar and N411 at the Investors and Investors (I&E) forex window since the regulatory hammer fell on BDCs.

Also, in a circular recently, the CBN banned Micro Finance Banks (MFBs) from carrying out transaction in foreign exchange and limit their lending activities to micro financing in the country.

The CBN had accused BDC operators of becoming conduits for graft and illegal money flows.

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On Monday, commercial banks quoted the dollar at N413 naira for retail transactions, which has been trading within a range since June.

One trader said the currency bans have drained liquidity from the unofficial market and that the naira could weaken further on the black market.

Nigeria is battling dollar shortages brought on by low oil prices, following disruptions linked to the COVID-19 pandemic.

The central bank has devalued the currency three times since March last year, but the naira has continued to weaken.

Sources in the BDCs said the ban on their operations will not stem the depreciation of the naira across the markets as the challenges is about supply side of the market, which is constrant by lack of inflow.

They accused International Money Transfer Organisations of withholding portion of the naira remitted by Nigerians in diaspora, further compounded the dollar shortage locally.

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