By Oludare Mayowa
Nigeria’s naira hit a fresh low of N980 to the dollar on Wednesday from N965. The local currency closed on Tuesday on the parallel market.
The local currency also closed lower on the official I&E forex window on Tuesday, trading at N776.60 to the greenback.
The naira had closed on Monday at the official foreign exchange window at N773.08 to the dollar.
Traders attributed the rapid decline in the value of the naira to a dollar shortage in the market.
According to a beneficiary of Diaspora remittance, banks are no longer paying out dollars to those who want to collect money remitted to them through Western Union.
“I have been going to my bank for the past two weeks to collect money sent to me by my brother from the US, and the bank has been claiming that there is no dollar.
“The bank has been persuading me to get naira instead at the official rate, but I refused,” a beneficiary who wants to remain anonymous told Global Financial Digest at a banking hall on Wednesday.
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Nigeria continues to face a dollar shortage despite the deregulation of the foreign exchange market by President Bola Tinubu, which led to the abolition of dual exchange rates.
However, analysts said that despite the reform, the margin between the official and parallel market rates continues to widen due to the dollar shortage and the country’s inability to increase its dollar earnings from oil production.
Though the country’s crude oil production output has risen to around 1.65 million barrels per day from below one million before the advent of the present administration, dollar inflow into the country has not significantly increased.
Oil prices declined on Wednesday on the international market as investors were uncertain about the direction of the interest rate set by the Federal Reserve at its next meeting and its impact on demand.
Global benchmark Brent crude futures fell slightly over $1 to $93.33 a barrel and were last down 80 cents, or 0.8 percent, at $93.54 a barrel by 0310 GMT. Brent hit $95.96 on Tuesday, its highest since November.
(Contact: omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)
