Naira in Fatal Accident, Crashes to N710 to a Dollar
The Nigerian Naira has crashed to N710 to one US Dollar on Wednesday. Random checks by Business Africa Digest showed the current parallel market rate is now pegged at N710 to a dollar.
The national currency, which traded for N670 against the dollar on Monday, has fallen even further by 6.7 percent in two days , according to data from Aboki Forex.
Today’s record fall comes a year after the Central Bank of Nigeria (CBN) prohibited the sale of foreign currency to bureau de change operators.
The apex bank had previously prohibited the sale of foreign exchange to BDC operators due to their unauthorized sales of foreign exchange above the market they were authorized to serve.
Prior to the ban, BDC operators were a major black market, providing exchange rate support to those who could not formally access foreign currencies directly from the CBN.
Business Africa had reported how the suspension of BDC operators’ ability to source foreign exchange from the CBN could seriously impact the country’s economy by mounting further pressure on the national currency.
When CBN Governor Godwin Emefiele banned the sale of forex to BDC, the exchange rate was around N501 to a dollar. However, a year after the ban, the value of the naira plummeted to N670 to a dollar.
In an attempt to further restrict the flow of forex at the parallel market, the apex bank threatened to arrest and prosecute Nigerians using naira to buy dollars last week.
“For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that,” Mr Emefiele said at a Monetary Policy Committee (MPC) meeting in Lagos.
