The naira tumbled to 445 against the United States dollar at the parallel market on Monday, down from the 440 recorded on Sunday.
The chronic dollar shortage hitting the economy took a new twist last Wednesday with the local currency dropping to 428 to the dollar after trading around 424 for several weeks.
The naira lost 0.05 per cent of its value between last Wednesday and Monday, an equivalent of N21 in less than a week.
Economic and currency analysts link the latest decline in the value of the local currency against the greenback to activities of currency speculators and an increasing dollar demand amid decline in forex supply.
According to them, the latest decline started on Wednesday, a day after the Central Bank of Nigeria’s Monetary Policy Committee retained the lending rate at 14 per cent contrary to the expectations of the fiscal authority, economists and other stakeholders.
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said, “The rising exchange rates we are seeing at the parallel market now are not realistic. They have to do with the activities of speculators.
“However, we cannot rule out the fact that there is an acute and chronic shortage of FX; there is a genuine demand that the supply cannot match simply because inflows have dropped significantly.”
According to Ezun, aside the activities of speculators, which have fuelled the latest volatility of the naira at the parallel, Nigerians’ lifestyle is skewed in favour of imported goods and this is fuelling excessive demand for forex.
The Association of Bureau De Change Operators of Nigeria had last week said the naira would recover by Monday due to the introduction of Travelex as a licensed forex dealer.
Travelex, an international money transfer organisation, ought to have begun the distribution forex to the BDC operators on Monday.
The President, ABCON, Aminu Gwadabe, said that forex distribution would be efficient and uniform across the association’s members, unlike what was obtainable in the past.
According to him, Travelex has the technology to sell forex to about 1,000 BDCs in a couple of hours, which is a major advantage.
However, Gwadabe told our correspondent that Travelex could not get the operating licence from the CBN until very late on Monday.
Consequently, he said Travelex would not commence the distribution of forex until probably Wednesday.
The ABCON president also noted that Deposit Money Banks stopped the sale of dollars to the BDC operators in the last one week.
He said the latest decline in the value of the naira at the parallel market was nothing but the activities of speculators.
Gwadabe said, “Several sharp practices have been going in the forex market and these elements want to continue making profits from the status quo. This is why they are speculating against the naira. They are attacking the naira. This is why the fall in the value of the naira is partly caused by the activities of speculators.
“The market is being driven by speculators who are taking advantage of the poor implementation of the central bank’s policy requiring banks to sell dollars to bureau de change operators to ease pressure in the market.”