Naira continues free fall, crashes to N658 per $1 at parallel market

The Naira fell at the parallel market to N658 to $1 on Friday, July 22, 2022 amid higher dollar demand, representing a depreciation of N38 or 6.13 per cent from the N620 it traded last week.

 Bureau De Change Operators (BDCs) blamed the continued depreciation of the naira on ongoing foreign exchange (FX) supply constraints, even as the traders put the buying price of the dollar at N640 and the selling at a profit margin of N18.

 A trader told The Trumpet that the unpredictability of the market was responsible for the depreciation, adding that Nigerians also prefer imported products, leading to massive FX demands.

 “Our love and preference for imported products is responsible for the massive FX demand. And as long as we prefer imported products to locally produced ones in the country, the naira will continue to fall.

 “Also, our politicians are busy mopping up all the foreign currency in the country, so the naira will continue to crash. The Central Bank of Nigeria (CBN) is also complicit in the woes that have befallen the naira. Will the management of CBN say they don’t know that politicians are mopping up all the foreign currency?

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 “For instance, last week, Rivers State Governor, Nyesom Wike, hosted the Rivers United Football Club players for winning the Nigeria Professional Football League. Did we not see the huge dollar rain there? Why were the players not given the naira equivalent of the money, instead of dollars?  The players are based in Nigeria, so why give them dollars instead of the naira equivalent? He asked.

 Although the CBN has said the parallel market was not the true reflection of the country’s exchange rate, but checks at the parallel market showed that buying price stood at N414.72, while the selling price stood at N415.72 to $1.

 Manufacturers said they were unable to access their FX needs from the banks the CBN mandated to sell to them, adding that they were asked to queue up for months before they were able to get some fraction of their FX needs, which forced them to evade the parallel market to source dollars for their raw material needs.

 “Serious manufacturers don’t depend on the banks for their FX needs. One will be made to queue for months before they are attended to. If one asked for $50,000, he should be glad to get $20,000, so from where will one get the balance?

 “Therefore, most manufacturers and importers rely on the parallel market for their FX needs, hence the naira has continued to depreciate,” a manufacturer said.

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