THE Naira dropped against the US Dollars, USD, by N470 in the parallel market which is the weakest rate in six weeks, despite the Central Bank of Nigeria, CBN, interventions to close demand for the dollar within the official window.
According to abokifx.com, a website that collates unofficial market rates of foreign currencies shows the naira closed at 382.10 against the USD on the official market, where the CBN sells limited amounts of the greenback to importers.
However, the naira conceded all grounds it had gained after the CBN started weekly interventions of supplying USD to importers and licensed Bureau de Change operators, indicating the perpetual existence of increased demand for the dollars.
The CBN had resumed sales to licensed Bureau de Change operators in September after the Federal Government opened up international travel following the lifting of COVID-19 restrictions.
The USD available within the official weekly window was insufficient to meet demand which accounted for the fall of the naira in the parallel market.
After trading at N465, N466 and N468 against the greenback on Tuesday, Wednesday and Thursday respectively, until it dropped on Friday to its weakest in more than a month.
As of November 10, the foreign reserves stood at $35.63 billion, the lowest since August 24, according to the CBN.
As oil prices remain within $40 to $42 per barrel, the CBN will find it even harder to support the exchange rate in the near term.
With foreign investors inflow still in lower proportions, and a limited window to attract forex, the situation could lead to further devaluation.
Amos Abba is a journalist with the International Center for Investigative Reporting, ICIR, who believes that courageous investigative reporting is the key to social justice and accountability in the society.