The Nigerian naira faced a fresh setback against the US dollar as it plummeted to 900/dollar in the parallel market on Wednesday. This drop follows closely on the heels of a mere fortnight when the local currency was exchanged at 960/dollar in the black market. Despite recent gains, the naira resumed its downward trajectory due to a scarcity of the US dollar in the black market. Earlier this week, the naira had been trading within the range of 850/dollar to 880/dollar.
In a concerning trend, the naira’s decline extended on Wednesday both in the parallel market and the Investor & Exporter window, settling at 773.42/$. Just the day prior, the naira had closed at 757.10/$ in the I&E Window. Bureau De Change operators, stationed in various cities including Lagos, Kano, Abuja, and airports, reported selling the dollar at rates ranging from 895/dollar to 905/dollar.
Sanusi Ibrahim, a BDC operator at Lagos airport, disclosed, “We bought and sold the naira today at 890/$ and N900/$.”
Similarly, Yusuf Kareem, a BDC operator in Abuja’s Central Business District, expressed the scarcity of the dollar, stating, “The dollar is still scarce. We sold for N900 today.”
At Allen Avenue in Ikeja, Lagos, currency dealer Alhaji Gambo Aliu priced the greenback at 905/dollar.
Despite efforts to stabilize the naira’s decline, the Central Bank of Nigeria is taking a stern stance, warning of potential license revocation for BDCs found in violation of its rules. Aminu Gwadabe, President of the Association of Bureau De Change Operators of Nigeria, confirmed this after a sensitization engagement with BDC operators. Gwadabe stated, “By 31st of August, 2023, any operator that breaches its circular on the allowable margin of -2.5 per cent and +2.5 per cent on average weighted rate of I&E closing rate, rendition of returns and payment of penalties, risks the revocation of the operating licence.”
The Central Bank introduced an operational framework for BDCs on Friday, aiming for foreign currency trading rates to align with those seen in the Investor & Exporter forex window. In a circular dated August 17, 2023, titled ‘Operational mechanism for Bureau de Change operations in Nigeria,’ the Central Bank laid out guidelines, including maintaining a spread within -2.5 per cent to +2.5 per cent of the Nigerian exchange market window’s weighted average rate from the previous day. Additionally, BDC operators are now required to provide periodic reports in accordance with upgraded financial institution forex rendition systems.
