Naira closes at N326/$ as scarcity of forex bites harder

The naira on Thursday depreciated the most against the dollar as scarcity of foreign exchange (FX) persists in the markets, according to BusinessDay investigations.

The naira weakened by N14 or 4.49 percent against the dollar at the parallel market after it closed at N326/$ compared with N312/$ traded on Tuesday.

It lost N13 or 4.19 percent against the greenback to close at N323/$ on Thursday, from N310/$ on Tuesday at the autonomous market.

The local currency remained stable at N199.35/$ at the inter-bank FX market. Also, the Central Bank of Nigeria (CBN) clearing rate remained stable at N197/$ at the inter-bank market.

Aminu Gwadabe, acting president, Association of Bureau De Change Operators of Nigeria (ABCON), said the scarcity of dollar was till biting had at the FX markets.

“No dollar. Demand is higher than supply. It is gloomy,” Gwadabe told BusinessDay on phone, saying the CBN should issue a circular directing banks and international oil companies to sell dollar to BDCs, adding that the CBN could peg a limit to the quantity of dollar to be sold.

“We see the naira falling further in the coming days if the central bank fails to lift dollar restrictions, “Gwadabe added.

Ghana’s cedi is seen easing slightly on an expected increase in dollar demand from local firms. There are also speculations that Nigerian businesses may be using local subsidiaries to buy dollars from Ghana due to restrictions in Nigeria, Reuters report.

After weakening nearly 4 percent in January on seasonal dollar demand from local importers and speculative buyers, the cedi has been stable in recent weeks. It was quoted at 3.96 to the dollar at 1122 GMT on Thursday.

“There has also been a suspicion of a possible spill-over of demand from some Nigerian traders as the dollar is reported to be scantily supplied especially on their parallel market,” analyst Joseph Biggles Amponsah of Dortis Research said.

The Kenyan shilling is expected to firm, mainly due to global weakening of the dollar against emerging market currencies. The shilling has been stable this year after weakening 11 percent in 2015.

At 1255 GMT, commercial banks posted the shilling at 101.80/90, stronger than last Thursday’s close of 102.10/20.

“We are most likely to test 101.50,” said a trader with a commercial bank. “Dollar is losing against nearly all the emerging market currencies, it’s just a matter of time before the shilling follows.”

HOPE MOSES-ASHIKE