Apex bank reportedly eyeing N500 to a dollar black market rate

folarin okunola

February 18, 2016 3:06 PM

On Wednesday, the Naira depreciated further to N385 per dollar in the parallel market as demand for foreign exchange intensified in the market.

A trader changes dollars with naira at a currency exchange store in Lagos February 12, 2015.

According to certain media reports, the Central Bank of Nigeria (CBN) is reportedly pushing for an exchange rate of N500 to a dollar on the parallel market to discourage importation of frivolous items into the country and in the process, conserve the nation’s dwindling foreign currency revenue.

On Wednesday, the Naira depreciated further to N385 per dollar in the parallel market as demand for foreign exchange intensified in the market.

“Officially, we are alarmed at the rising exchange rate between the Naira and major international currencies. But unofficially, we are really optimistic that the expensive cost of major foreign currencies will discourage our people from travelling abroad to bring in all manner of goods the country could either produce domestically or do without entirely. For us at the CBN, the development is a double-edged sword,” said a senior official of the CBN, according to Business Journal.

In the same vein, a market analyst in Lagos stated that the CBN could be the biggest beneficiary of the rising dollar value against the Naira, according to the Business Journal.

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“Who wants to import at a loss? What the CBN failed to achieve by banning 18 items, could now be achieved through the back door because many importers will simply think twice before travelling to Dubai or China to bring in second-hand clothing that could become very expensive for people to buy. The end result would be less importation. The only challenge would be for genuine operators in the real sector who need foreign exchange to import raw materials and machinery for industrial production,” said the market analyst.

Confirming the situation, Mrs. K. Obioma, an importer, said: “Normally, l travel to Dubai or London once a month to bring in mostly used consumer goods but the current high cost of dollar has become a real headache for my business. And that explains why l have not made any trip since this year. The issue is: how many people can afford such goods at the new price and how will l recoup the investment and make profit? Of course, l’m now looking inward for a business l can easily transact locally without the problem of dollars.”

Naira further depreciated, on Wednesday, to N385 per dollar in the parallel market as demand for foreign exchange increased immensely.

This means the naira has dropped by N60 against the dollar this week in the parallel market.

The Naira however remained stable at the official interbank foreign exchange market coming in at N199.34.

folarin okunola