The naira has fallen to 418 against the dollar at the parallel market on Tuesday as scarcity of foreign exchange continued to weigh on the official interbank and black market. The naira traded at a fresh record low of 418 to the dollar on the black market, against 414 a dollar on Monday, traders said.
The local currency, which closed at 414 against the greenback on Monday, traded at 415 in Lagos, 417 in Abuja and 418 in Kano, foreign exchange dealers said.
Foreign exchange analysts believe the lingering scarcity of forex has been worsened by the banning of eight commercial banks from the forex market by the Central Bank of Nigeria.
The CBN last week Tuesday banned nine lenders from forex transactions for failing to remit the Nigerian National Petroleum Corporation’s $2.334bn into the Treasury Single Account.
The United Bank for Africa Plc, one of the nine lenders, was later re-admitted after it remitted its share of the funds to the TSA.
A day after the CBN banned the nine banks from the forex market, the local currency depreciated to 402/dollar, down from 397 it closed against the greenback on Tuesday.
The local currency has continued to depreciate gradually. Forex dealers maintained that the demand pressure on the dollar, mounted by summer travellers and parents paying schools fees of their children studying overseas ahead of resumption in September, was exacerbated by the CBN’s forex ban on the nine lenders.
The naira, which hit a fresh record low since the CBN floated the currency on the official interbank market in June, first touched 400/dollar at the black market this month.
Meanwhile, the CBN sold around $1.5m at the interbank forex market on Tuesday to support the local currency and ensure the closing rate stabilised, Reuters reported, quoting currency traders.