The national currency of Nigeria, the Naira, took a sharp
dive downwards on Tuesday, November 18, as it fell by 270 kobo, with the
parallel market exchange rate rising to N180 per dollar from N177.3 on
Monday.
This situation was said to have been triggered by the restrictions
introduced by the CBN to curb foreign exchange demand at the official
market.
The CBN banned banks from selling dollars to Bureaux de Change (BDCs)
and also
excluded importation of six items, electronics, finished
products, information technology, generators, telecommunication
equipment and invisible transactions from official foreign exchange,
saying it would no longer sell official forex for their importation.
Thus, the apex bank unwittingly shifted forex demand for importation
of the six items from the official market to the interbank market.
The restrictions triggered sharp increase in demand for forex in the
interbank market, and scarcity of dollars in the parallel market. This,
according to a foreign exchange dealer created a scarcity situation in
interbank and the subsequent steady depreciation of the naira.
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