The naira was sold at the parallel market for 440 per dollar on Sunday, as the lingering foreign exchange scarcity increased to a new level. The local currency, which closed at 436 against the greenback on Thursday, eased to 435 in the early hours of Friday. It closed at 439 per dollar.
The naira had closed at 428 to the greenback on Wednesday, down from 424 on Tuesday, as lingering foreign exchange shortage weighed on the economy.
The latest declines in the naira value started on Wednesday, a day after the Central Bank of Nigeria’s Monetary Policy Committee retained the benchmark lending rate at 14 per cent.
The MPC had after its two-day bi-monthly meeting left the Monetary Policy Rate unchanged, rebuffing calls for rates cut by analysts, stakeholders and some government officials, including the Minister of Finance, Mrs. Kemi Adeosun.
However, economic and currency analysts have said the decline in the value of the local currency against the dollar has nothing to do with the MPC decision.
At the interbank market, the naira closed at 307.79 on Friday. It closed at 307.25, 311 and 312 on Tuesday, Wednesday and Thursday respectively, according to data posted on the FMDQ OTC platform.
“There is shortage of dollar supply. Diaspora remittances have dropped. This is why you can see the rate dropping at the parallel market,” an economic analyst and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said.
The development came amid depleting external reserves, which stood at $24.8bn last Monday. The latest data posted on the CBN website showed that the foreign exchange reserves were down by 3.4 per cent from a month ago to its lowest level in more than 11 years, as the apex bank sells the greenback at the interbank market to support the naira.
Economic and currency analysts had said there had been no significant policy response to the fall in the reserves, further fuelling the concerns.