Over the weekend, the value of the naira experienced a decline, with the currency trading at N1,510 to a dollar on the parallel market and 1,466.31 at the official market.
This recent depreciation marks a reversal in the trend, as the naira had previously shown signs of stability against the dollar, trading below N1,000, following a series of interventions and reforms by the Central Bank of Nigeria (CBN).
Despite efforts by the CBN to boost liquidity in the market by supplying dollars to Bureau De Change (BDC) operators, the exchange rate saw a notable increase, closing at N1,510 at the black market.
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According to a Bureau De Change operator, the surge in demand coupled with inadequate dollar supply has contributed to the spike in exchange rates.
The CBN’s initiatives, including discounted dollar sales to registered BDC operators and clearing foreign exchange backlog, have not been sufficient to mitigate the crisis, as evidenced by the naira being rated the world’s worst-performing currency in recent reports.
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Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), expressed concern over the liquidity challenges and called for amnesty for individuals hoarding foreign currencies to encourage liquidity in the market.
He urged the CBN to explore alternative channels for dollar supply to BDC operators, emphasizing the importance of voluntary compliance to regulatory measures.
Despite setbacks, Gwadabe acknowledged some success in stabilizing volatility but emphasized the need for sustained efforts to address the currency’s challenges.