By Dipo Olowookere
The exchange rate of the Naira to the Dollar at the parallel market is now N645/$1, Business Post is reporting based on data gathered from various foreign currency traders in Lagos, the commercial hub of Nigeria.
On Monday, the Nigerian currency was sold at N680/$1 in the unauthorised segment of the foreign exchange (forex) market but on Tuesday, the Naira gained N35 or 5.15 per cent.
However, tension still persists among FX hawkers as most of them are unsure of what will happen in the coming days.
The FX traders buy the Dollar from customers at N620/$1 to resell at N645/$1 for those who need the American currency for their transactions, which include travelling, school fees, medical bills, and payment of foreign goods services, among others.
Customers usually approach the black market for Dollars when they are unable to get the currency at commercial banks, which are authorised by the Central Bank of Nigeria (CBN) to sell to users.
Nigeria, which relies heavily on the sale of crude oil to earn forex, has not been able to get more because of low oil production caused by attacks on oil installations in the Niger Delta.
Also, the over-reliance on foreign products has put the local currency under pressure, making its value deplete fast and making the Dollar very attractive, spiking a rise in the demand.
Last week, the Naira depreciated to N715/$1, forcing the Senate to summon the CBN Governor, Mr Godwin Emefiele.
After news of his invitation broke, the domestic currency started to gain strength against the greenback at the parallel and from indications, it could still gain weight in the next few days.
“Expect the Naira to appreciate more in the coming days because of the clamp down on street forex traders, though if the action intensifies, another doom spells for the currency,” an economist based in Lagos, Ms Dupe Oguntade, told Business Post on Tuesday.
Meanwhile, in the peer-to-peer (P2P) segment, the Naira appreciated against the American currency by N20 or 2.86 per cent to sell for N680/$1 compared with the previous day’s value of N700/$1.