According to Oyetunji Abioye's report for punch, the naira closed flat at 485 against the United States dollar a the parallel market on Wednesday, three trading days after the local currency fell against the greenback to the current level.
The naira has been under persistent pressure both at the
official and parallel foreign exchange markets owing to the
acute shortage of the United States Currency and economic experts said unless the supplyproblem at the forex market was abated, the volatility in theforex market would continue.
“The challenge at the forex market is still supply; price is
determined by the interplay of demand and supply,” currency
analyst at Ecobank Nigeria, Mr. Kunle Ezun, said.
The Managing Director, Cowry Asset Management Limited,
Mr. Johnson Chukwu, said the Federal Government needed to
access an emergency lifeline to the tune of at least $10bn to
stabilise the exchange rate and restore investor confidence
to the market.
Economic and financial experts expect the naira to weaken
further against the US currency in coming weeks as the
Christmas celebration draws close.
They argued that the crackdown on the parallel market
currency traders and the persistent scarcity of the greenback
would make further weakening of the local currency
Reuters had reported that foreign exchange demand by small
businesses was set to surge ahead of holiday season sales.
Last week, the naira fell by 2.08 per cent week-on-week to
480, compared to 470/dollar the previous week.
The naira has, however, consistently closed around 305.5 a
dollar level since August via the official window.
“The consistent clampdown on black market operators by
security agents has driven some currency retailers
underground, putting more pressure on available hard
currency,” one dealer said.