Naira To Remain Weak Against Dollar

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The naira is expected to remain weak against the dollar at the parallel market until the first week of January following the suspension of foreign exchange sale by the Central Bank of Nigeria The Punch report.

The CBN had on Thursday suspended its weekly forex sale to Bureaux De Change operators till January 4, 2016.

The suspension, a normal practice in the financial services sector before Christmas and the New Year, is expected to generate some level of forex scarcity during the Yuletide season, considering the continued pressure on the naira in recent times.

Currency analysts told our correspondent on Friday that the forex sale suspension would make the naira to remain weak, noting that forex scarcity would make it difficult for the naira to appreciate during the season.

They added that low activities during Christmas and the New Year holiday could make the local currency to remain at its current level against the greenback, or possibly drop slightly.

The Acting President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, noted that forex sale had been suspended till January while business activities had been halted till after the Yuletide break.

“For now, most activities have been suspended; the naira may remain at the current level till January,” he added.

The CBN sold $10,000 each to 2,088 BDC operators in its weekly forex sale on Wednesday, totalling $20.8m (N4.1bn).

Forex scarcity, which is causing persistent decline in the nation’s external reserves, has made the CBN to ration dollar supply to the banks, importers, the BDCs and the general public.

About two weeks ago, the CBN cut its weekly forex sale to the BDCs from $30,000 to $10,000 each.

Earlier, the central bank had refused to sell forex to over 1,600 BDCs over the absence of proper documentation. The development made the naira to fall from 241 to 280 at the parallel market in the past few weeks.

On Thursday, the naira recorded 260 against the greenback. The naira had fallen to a record low of 280 to the dollar at the parallel market after beating what was initially regarded as a 42-year-low.

The central bank had on Monday closed the interbank foreign exchange market till January 4, 2016.

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