Naira hits 418/dollar as forex scarcity lingers

The naira plunged to 418 against the dollar at the parallel market yesterday as scarcity of foreign exchange continued to weigh on the official interbank and black market.

 

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 exacerbated 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.