The naira maintained its downward trend against the dollar as it traded for 876/$ at the parallel market on Sunday.
Some Bureau de Change operators, who spoke to The PUNCH, said the local currency had earlier exchanged to the dollar at 820 a week earlier.
Since the unification of the exchange rates in the country by the Central Bank of Nigeria in recent weeks, the naira had continued to slide to the dollar, due to liquidity crunch, speculations, and other challenges.
Speaking with our correspondent, a BDC operator in Lagos, Alhaji Sanni Abdul, stated, “Naira is currently bought and sold at 850/$ and 876/$. The exchange rate has not been stable for some time now.”
Another BDC operator, Alli Ibrahim, said, “Things are getting more expensive. As of Friday, we were buying and selling the naira at 850/$ and 865/$.”
Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said the foreign exchange market was evidently under pressure as a result of a number of factors.
He said there was a curious surge in monetary expansion in the last month.
Yusuf said, “Money supply grew by an unprecedented 15 per cent in one month between May and June 2023. Broad money grew by over N9tn, from N55.7tn to N64.9tn. This surge in monetary growth is unprecedented. Obviously, this must have had an effect on the exchange rate.”
He said the monetary authorities should investigate this drastic growth in money supply and take steps to curb subsequent expansion.
“Such dramatic growth in money supply poses a significant risk to macroeconomic stability, especially price stability,” he said.
Over the last few years, he said, there had been a cumulative backlog of unmet foreign exchange demand, running into billions of dollars as a result of acute illiquidity in the foreign exchange market.
With a more liberalised forex market, he said, the pressure of the backlog of unmet demands and other maturing forex-related obligations had been unleashed on the investors’ and exporters’ window.
However, at the Investor & Exporter forex window, naira appreciated by 3.24 per cent against the dollar in the previous week.
According to the data from the official trading platform of FMDQ Securities, there was a slight appreciation of the naira by 3.24 basis per cent, bringing its value to 777.82/$. It ended the previous week at 803.90/$.
As of Friday, the naira traded at an intra-day high of 855/$ and a low of 665/$ with a total turnover of $77.99m.